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The Morning Brief: Magnetar, Saba Launch New Funds

Two hedge fund firms have launched new funds.

Alec Litowitz’s Magnetar Capital has raised nearly $200 million for two new funds, Magnetar Solar Holdings (Cayman) and Magnetar Solar Opportunities Fund. The Evanston, Illinois-based hedge fund firm indicated in a regulatory filing that the new offerings are private equity funds. The minimum investment for the offshore version is $100,000, according to a filing. Magnetar, which manages $12.4 billion, declined to provide further details.

Meanwhile, Boaz Weinstein’s New York-based Saba Capital Management has raised about $110 million or so for a new fund, Saba E Fund, according to a regulatory filing. It is not clear what exactly the new fund’s strategy will be. In July, the Wall Street Journal reported that investors yanked more than 20 percent of assets from its main fund. The Saba Capital Offshore Fund was down 4.10 percent for the year through September. It lost 6.76 percent last year and lost 3.87 percent in 2012.

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Credit specialist Cohanzick Management announced it launched the Nexus Fund, a net short-biased strategy focused on “capital structure mispricing and opportunistic investments in credits” the firm deems to be deteriorating or overvalued, according to the firm. Cohanzick, which manages $1.6 billion, says the fund may also incorporate long equity positions of the same issuers. It also may short corporate credits that are expected to experience deterioration due to declining secular trends, failing business models or economic weakness.

“The current low interest rate environment may incentivize companies to enhance shareholder value through financial engineering,” said Cohanzick founder David Sherman in a press release. “The new fund is designed to profit from this circumstance by shorting bonds of companies that pursue shareholder-friendly activities such as increased dividends, aggressive share repurchases, fully priced acquisitions and spinoffs.”

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Credit Suisse trimmed its price target on hedge fund favorite Priceline Group to $1,550 from $1,600 and lowered its earnings estimates for 2014 through 2016. It also retained its Outperform rating on the stock. 
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Meanwhile, the Credit Suisse Hedge Fund Index fell 0.01 percent in September and is now up 3.41 percent for the year. The managed futures index leads the way, up 6.37 percent for the year. The distressed index is up 5 percent while multi-strategy is up 4.90 percent.

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