This content is from: Portfolio

The Morning Brief: Carl Icahn Backs Down on Apple

Carl Icahn has given up any hope of Apple distributing a large sum of cash to him and other shareholders. The septuagenarian activist investor sent a letter to Apple shareholders stressing that he is disappointed that ISS — a shareholder advisory firm — on Sunday recommended that institutions vote against his buyback proposal at Apple’s February annual meeting. But he concedes that Apple’s recent purchase of $14 billion worth of stock puts it on track to repurchase at least $32 billion in shares, and that his proposal in effect is calling on the board to shell out only another $18 billion on stock buybacks to meet his earlier recommendation.

“In light of these actions, and ISS’s recommendation, we see no reason to persist with our non-binding proposal, especially when the company is already so close to fulfilling our requested repurchase target,” Icahn states in the letter. He also writes that he is excited about the future of the of the iPad and iPhone maker in light of CEO Tim Cook’s plan to launch new products in new categories this year. Shareholders applauded, trading the shares up Monday by 1.73 percent, to close at $528.92.

Starboard Value’s Jeffrey Smith continues to turn up the heat on Darden Restaurants. In a letter sent Monday to the restaurant company’s chairman and CEO, Clarence Otis, and the company’s board of directors, the New York–based activist hedge fund manager repeated his opposition to the company’s plan to spin-out or sell Red Lobster and said if the company moves forward with its plan before the annual meeting, he is prepared “to take all steps necessary to hold the board accountable for its actions,” including nominating a majority slate of director candidates and seeking the support of shareholders to replace a majority of the board at the 2014 annual meeting. He said discussions with other shareholders over the past two weeks found similar concerns regarding the plan and their desire for the company to undertake “a more fulsome review of all available opportunities” to create value.

A former co-head of Goldman Sachs’ macro trading team in the Asia-Pacific region plans to start his own hedge fund, according to Bloomberg. Leland Lim, who is now retired, plans to launch his Hong Kong-based fund sometime around mid-year and focus on global macro in Asia, mostly trading currency and interest-rate instruments.

Permal Group is the latest alternative investment firm to get into the open-end alternative mutual fund business. The Legg Mason unit has launched the Permal Alternative Select Fund, a multistrategy fund, which offers investors daily liquidity. It comes with just a $1,000 minimum investment. The fund, which will use a tactical asset allocation program to allocate assets to strategies the firm asserts have historically had a low correlation to each other, will farm out money to outside firms with specialties in various strategies.

Its initial subadvisers are: Equity Hedge: Apex Capital; Event-Driven: River Canyon Fund Management, a wholly-owned subsidiary of Canyon Capital Advisors; Global Macro (Discretionary): TT International; and Global Macro (Systematic): BH-DG Systematic Trading, part of a joint venture arrangement between David Gorton and Brevan Howard. Permal manages about $22 billion.

New York–based Tiger Global once again told shares in TAL Education Group, the China-based after-school tutoring services provider, reducing its stake to 7.2 percent.

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