This content is from: Portfolio

The Morning Brief: More Bad News for Greenlight And Consol Energy

Deutsche Bank cut its rating on Consol Energy, a major holding of David Einhorn’s Greenlight Capital, from Hold to Sell and slashed its price target from $27 to $14, citing “potential downside on weakening commodity prices” such as coal and natural gas and a “stressed balance sheet amid low operating cash flows.” The bank also reduced its cash flow estimates for 2015 through 2017 by 12 percent to 22 percent. We reported earlier this week that shares of Consol plunged 24 percent in July and were down more than 52 percent for the year through the end of July. They are down another 14 percent or so in the first two days of August.

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Daniel Och’s multistrategy fund, OZ Master Fund, climbed 0.7 percent in July, and is now up 4.83 percent for the year. OZ Asia Master Fund lost 3 percent last month, cutting its gain for the year to 8.6 percent. OZ Europe Master Fund jumped 2.64 percent for the month and is now up 8 percent for the year. New York-based Och-Ziff Capital Management Group, one of the few hedge fund firms that are publicly traded, said in a regulatory filing that as of August 1, it had $46.5 billion under management, which is down $300 million from the prior month. In a separate regulatory filing Tuesday, Och-Ziff said that as of June 30, assets in its multistrategy products totaled $33 billion, down 3 percent from the prior year. Assets in its flagship, global multistrat fund, OZ Master Fund, were $27 billion, “essentially unchanged” from a year earlier. Assets in dedicated credit, real estate and other single-strategy fund amounted to $15 billion, which works out to 31 percent of assets under management. The firm also noted that $16.5 billion, or 34 percent of assets under management, were subject to initial commitment periods of three or more years, an increase of 12 percent year-over-year.

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Daniel Loeb’s Third Point Offshore cut its net exposure in its long-short book to 66.6 percent at the end of July from 70.2 percent the prior month. The fund, managed by New York-based Third Point, also trimmed the net exposure in its credit book to 27.4 percent from 29 percent. We earlier noted that the offshore fund was up 0.8 percent in July and 5.7 percent for the year.

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Aberdeen Asset Management is acquiring hedge funds of funds specialist Arden Asset Management. Aberdeen, based in the city of that name in Scotland, has $480 billion in assets under mangement while Arden manages $11.4 billion, ranking number 14 on Alpha’s most recent survey of funds of funds. “The deal significantly strengthens our hedge fund solutions capability and expands our global client base,” states Martin Gilbert, chief executive of Aberdeen, in a press release. “Arden’s liquid alternatives platform in the U.S. is particularly attractive as it provides investors with exposure to a portfolio of hedge fund-like strategies but importantly offers daily liquidity.”

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