This content is from: Portfolio

The Morning Brief: Will Hillary Bite the Hands that Feeds Her?

Hillary Clinton is clearly a big fan of Alpha’s 2015 Rich List of highest earning hedge fund managers. In her official campaign-kickoff speech Saturday, the Democratic presidential candidate, who counts among her friends Avenue Capital’s Marc Lasry, once again railed at the amount of money the top-earning hedge fund managers make. “While many of you are working multiple jobs to make ends meet, you see the top 25 hedge fund managers making more than all of America’s kindergarten teachers combined,” she proclaimed to her audience. “And, often paying a lower tax rate.” It would be nice of her, of course, if she actually mentioned that Alpha is her source. And, as I asked earlier when I noted her citing the Rich List, is she really promising to rein in the favorable treatment of carried interest? Is she really going to tick off the hedge fund community, many of whom have frequently supported her, her husband as well as her daughter, who once worked for Avenue? We’ll be watching closely if she wins the election.

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Credit Suisse Friday came out in support of two high-profile activist hedge fund stocks. The investment bank raised its price target on Citrix Systems from $77.50 to $85 after New York-based Elliott Management late last week fired off a letter to the software company’s board laying out plans for boosting the shares. “We expect one of four outcomes to occur, all of which could drive further meaningful upside to the stock,” Credit Suisse said in a note sent to clients. The bank also raised its earnings estimate for 2016 and 2017. Separately, Credit Suisse raised its rating on Darden Restaurants to Outperform from Neutral and raised its price target from $69 to $77, explaining that it sees potential for “significant” earnings per share upside as the restaurant company “implements wide-ranging improvements in operations, the cost structure and capital efficiency.” Last October New York activist hedge fund Starboard Value won its proxy fight against the owner of Olive Garden, as shareholders elected all 12 Starboard-nominated directors to Darden’s board.

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Farallon Capital Management disclosed it owns nearly 19 million shares of Perfect World Company, or 8.6 percent of the Chinese online gaming company’s total outstanding. At the end of the first quarter, the San Francisco hedge fund firm, headed by Andrew Spokes, owned just 1.32 million shares. The filing was made in a 13D.

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New York-based OZ Management disclosed it owns about 1.8 million shares of PennTex Midstream Partners, or 9.02 percent of the natural gas master limited partnership. The filing was made in a 13G, meaning it is a passive investment.

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Shares of Mannkind rebounded Friday by nearly 3 percent after falling almost 22 percent in the three previous days following our profile of Jason Karp, founder of New York–based Tourbillon Capital Partners, who said he believes the biotechnology company’s stock is “worthless.”

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