Scout Capital Management said it will close its $5 billion hedge fund firm after 15 years of operation, according to The Wall Street Journal. It appears that the two founders, Adam Weiss and James Crichton, have different career goals. Weiss plans to start a family office and write a book on investing while Crichton wants to launch a new firm that will manage outside money. “After much soul searching,” a Scout letter to clients reportedly stated, “Adam has decided to step back from the management of outside capital. Because James intends to manage outside capital in the future, we have arrived at a crossroads for Scout.” The letter added that the two principals were unable to devise a plan to manage the existing funds “through such significant change without imposing unnecessary risks upon you.” Scout plans to return 95 percent of outside money around April 1. Scout gained 21 percent last year and has compounded at more than 14 percent since inception, according to the report.
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Keith Meister’s Corvex Management and Related Fund Management filed a 74-page presentation detailing why shareholders should support their consent solicitation to remove the entire board of trustees of CommonWealth REIT. The two dissident investors said they will request a record date by February 16 and that CommonWealth must set the date within 10 business days of the request. And the consent solicitation must be concluded within 30 calendar days of the record date, they say. The activists believe the stock could hit $40 by the end of 2015 if CommonWealth installs “institutional quality management and benefits from internalized management, operational turnaround and improved capital allocation.”
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Shares of hedge fund favorite Google jumped 2.60 percent to $1135.66 after it announced it is selling Motorola Mobility for a loss. It rose less than 1 percent after the market closed Thursday after reporting higher revenues than analysts forecast but lower earnings than the consensus estimate.
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The Men’s Wearhouse fired off a letter to the independent directors of Jos. A. Bank Clothiers, further making its case for its all-cash $57.50 a share takeover offer. It also said it is prepared to increase the offer price if Jos. A. Bank “can demonstrate or we can discover additional value through discussions or limited due diligence.” There’s been no response yet from activist hedge fund Eminence Capital, which has supported The Men’s Wearhouse bid.
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Remy W. Trafelet’s Trafelet Capital Management announced that George R. Brokaw has joined as a managing partner and it will change the name of the firm to Trafelet Brokaw & Co. It also said its investment manager, Trafelet Brokaw Capital Management, will “selectively open” to outside capital. Brokaw previously was a managing director at Highbridge Capital Management. Before that, he held senior positions at Perry Capital and Lazard. Trafelet Brokaw is a long/short equity fund that currently manages more than $425 million in assets.
