Richard Perry’s New York City hedge fund firm Perry Capital has cut its ill-fated stake in J.C. Penney to 10 million shares, or 3.8 percent of the total outstanding, from 8.6 percent. The calculation of its current share of Penney stock is based on the assumption that the retailer completes its planned secondary offering. Otherwise, Perry would hold 4.53 percent of the outstanding shares. Perry is yet another billionaire tripping up over an investment in a type of business he probably hasn’t visited in decades. Somewhere Peter Lynch is laughing, or shaking his head.
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Keep that exit door wide open. Another key SAC Capital Advisors employee is bolting from the reeling hedge fund firm, CNBC reports. Nick Tiller, who ran more than $1 billion and focused on energy stocks, reportedly is leaving the Stamford, Connecticut firm by the end of the year. He plans to spend more time on Sustainable America, a philanthropic organization he founded that aims to decrease oil consumption and boost food production.
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General Motors has agreed to pay $50 million stemming from a lawsuit involving a deal struck with several hedge funds when it was about to file for bankruptcy in 2009, Reuters reports. Critics of the deal said GM worked out an arrangement that favored hedge funds, including John Paulson’s Paulson & Co. and Paul Singer’s Elliott Management. GM had warned the litigation could cost it $918 million, but the deal removes this possibility. The plaintiffs had argued that a sweet-heart deal between the hedge funds and the “old” GM before it filed for bankruptcy was intended to prevent GM Canada being dragged into bankruptcy, which would have made it much more difficult for GM to sell its most attractive assets.
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Shares of hedge fund favorite Apple rose 2.35 percent, to $487.95, after Carl Icahn said he met with the company’s management and pushed for a $150 billion stock buyback. He said that since a lot of the cash is held overseas, Apple should borrow money at low rates to finance the repurchase. “It’s almost an absurdity not to do it,” he reportedly said. “That’s why I’m telling you I’m not going away on the subject.”
