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The Morning Brief: Leon Cooperman’s Omega Receives Subpoenas

Omega Advisors’ Leon Cooperman disclosed that he received a subpoena from the U.S. Attorney’s Office in New Jersey and the Securities and Exchange Commission, according to CNBC. The New York-based hedge fund manager, who has a virtually unblemished reputation, said the probe is in the early stages and his firm is cooperating fully, according to the report. CNBC said federal officials are requesting information related to trading of certain securities but did not provide further details.

Cooperman told CNBC: “We are cooperating fully with the government’s request for information. There have not been any allegations of any wrongdoing at Omega. We have conducted ourselves properly at all times and are confident that when the government completes its review it will come to the same conclusion.”

Cooperman has generated a 14 percent annualized return since launching his funds in 1991 after serving as a partner at Goldman Sachs. Last year he lost 2.8 percent and therefore likely will not qualify for Alpha’s Rich List ranking of top-earning hedge fund managers. In 2013 he made $825 million.

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Tiger Global Management’s venture capital arm has made another investment in an Indian Internet company. The New York investment firm led a $5 million Series A funding for Roposo, a social network firm for fashion products, according to techcrunch.com. Other participants in the financing include Binny Bansal, co-founder and chief operating officer of Flipkart, another company in which Tiger Global has invested in the past.

Separately, Tiger Global said in a regulatory filing that it sold nearly 500,000 shares of Bitauto Holdings, reducing its passive stake in the Chinese automotive Internet company to 9.6 percent of the total outstanding.

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Kenneth Griffin’s Chicago-based Citadel disclosed that it owns 12 million shares of Whiting Petroleum Corporation, or 5.9 percent of the total outstanding. At year-end, Citadel owned 2.4 million shares of the independent exploration and production company, as well as large positions in call options and put options on the stock.

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Deutsche Bank raised its price target on Kraft Group Holdings from $62 to $83, one day after the stock surged about 33 percent on news the food company is merging with H.J. Heinz. In a note to clients, Deutsche Bank says the merger is not surprising, but “the fact it’s occurring via a public entity plus a special $16.50 dividend” and that management is focused on long-term revenue synergies “is a shock.” However, it retained its Hold recommendation, asserting the valuation is fair.

Meanwhile, Credit Suisse raised its price target on Kraft from $62 to $85, telling clients: “We think investors should hold onto their Kraft shares even though the stock traded above our initial expectations. This is a unique opportunity for investors in a publicly held stock to latch onto an outstanding management team in consumer staples with an excellent track record for value creation.”

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Credit Suisse also raised its price target on hedge fund favorite Apple by $5, to $145, and raised its estimates, citing iPhone strength. “We see evidence of near term iPhone strength, as well as better than expected mix,” it tells clients in a note.

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