This content is from: Portfolio

The Morning Brief: The Sacramento Kings and Total Industry Capital

Another hedge fund manager has bought a chunk of a professional sports franchise. Seattle-native Chris Hansen of Valiant Capital has teamed up with Microsoft Chief Executive Steve Ballmer to purchase a controlling interest in the Sacramento Kings basketball franchise for an undisclosed sum. They are widely expected to move the team to Seattle, which recently agreed to build a new indoor arena thanks to the aggressive urging by Hansen. The hedge fund manager is unofficially called a Tiger Grandcub because he spent seven years working for Tiger Cub John Griffin of Blue Ridge Capital. In 2008, he started Valiant, a global long/short equity hedge fund with more than $3 billion under management.

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Once more with HFR. The hedge fund data collector reports that at year-end, total industry capital surged to a record $2.25 trillion, according to the HFR Global Hedge Fund Industry Report. This compares with the $2.6 trillion that eVestment counted. Dow Jones Credit Suisse Friday said total industry assets under management finished the year at $1.8 trillion.

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HFR says the hot strategy these days is relative value arbitrage (RVA). The group turned in a 10.5 percent gain in 2012, the fourth straight profitable year. As a result, the strategy group pulled in $6.5 billion of new capital in the fourth quarter and $41.4 billion for the year. As a result, RVA is now the largest strategy with $609 billion, exceeding equity hedge as the top strategy for the first time since 1991.

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Dow Jones Credit Suisse says 75 percent of hedge fund managers posted gains in 2012, compared with just 35 percent in 2011. It also said that last year a larger percentage of assets went to funds with monthly or better liquidity while funds with longer lock-ups continued to see a decline in assets.

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A subsidiary of Och-Ziff Capital Management bought the Legacy Gulf Club in southwest Florida for $3 million. The golf course was designed by Arnold Palmer and opened in 1997.

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Ken Griffin’s Citadel Advisors reported a 5.2 percent stake in Tivo, the digital TV recording company. The stock closed at $12.07 on Friday, up 0.42 percent. Interestingly, the company had about $610 million in cash and short term investments at the end of the October quarter, which works out to more than $5 per share, nor nearly half the company’s market capitalization.

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Chipotle, which Greenlight Capital’s David Einhorn talked up as a big short back in October, got a boost Friday when Credit Suisse Securities raised its estimates and its price target to $300 from $290. The stock climbed 1.62 percent, to $295.02 on the news. However, the stock is still down for the year, but just off 3.8 percent since the hedge fund manager pushed his short position at the early October Value Investing Congress.

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Shares of JC Penney, a big long bet by Pershing Square’s Bill Ackman, surged more than 4 percent, to $18.87 on Friday. However, they are still down for the year.

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HFMWeek named the winners of its 2012 HFMWeek US Hedge Fund Services Awards.

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