Greenlight Capital’s David Einhorn said he increased his stake in iPhone and iPad maker Apple. He also applauded the company for taking a “major step forward” by issuing debt in order to return cash to investors. He also asserted that Apple “has a terrific operating platform.” Einhorn made his comments on a conference call Tuesday held by his Greenlight Capital Re Ltd. reinsurer. He and other investors had been calling for the company to return more cash to its shareholders.
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John Paulson is taking a beating on his commitment to gold. His $700 million gold fund lost 27 percent in April alone and is now down 47 percent through April, according to Reuters.
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Score one for Paul Singer’s Elliott Management. On Monday an investor group led by Bain Capital and Golden Gate Capital agreed to buy BMC Software for about $6.9 billion, or $46.25 per share. Elliott owns 6.2 percent of BMC Software. Now, published reports say investors are looking to encourage a merger between BMC and Compuware, another among Singer’s top-10 holdings at year-end. Meanwhile, he is in the middle of a proxy fight with energy giant Hess. These activist battles, however, did not go far in boosting returns in the first quarter. According to a letter sent by Singer to investors, his hedge funds only gained 3.1 percent in the March period. Since the beginning of the second quarter, his activist stocks have barely budged. Compuware is down less than 1 percent, BMC is down about a dollar, to $45.34, while Hess is up $0.65, to $72.26.
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Credit Suisse raised its earnings estimates on New York hedge fund firm Och-Ziff Capital Management and lifted its price target to $12.50 from $11 after the firm reported better than expected first-quarter earnings. The higher earnings were due to a substantially higher amount of performance fees due to the early recognition of performance fees relating to a restructuring of one client relationship, the investment bank Tuesday pointed out in a note to clients.
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Asia is the hot spot for hedge funds. Investors pumped more than $1.3 billion in net new capital to Asian hedge funds in the first quarter, the largest quarterly allocation since the first quarter of 2011, according to industry tracker Hedge Fund Research. The number of Asian hedge funds rose to more than 1,150. Total Asia-focused hedge fund capital rose by 7.6 percent to nearly $95 billion, thanks in large part to stimulus measures in Japan, which has attracted Asian-focused as well as macro and other event-driven funds. According to HFR, nearly 370 hedge funds invest primarily in Japanese capital markets — including equity, debt and currencies — while 270 funds invest across all of Asia. More than 500 funds invest in emerging Asia.
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The HFRI Fund Weighted Composite Index rose 0.69 percent in April, boosting its return to 4.37 percent for the first four months, according to HFR. The Yield Alternatives Index is leading the way, with a 9.78 percent gain through April. Little surprise, short-bias funds are the only ones in the red, down 7.45 percent for the first four months.
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More bad news for J.C. Penney. The embattled retailer reported that first-quarter same-store sales fell 16.6 percent, worse than what had been expected. The stock fell more than 3 percent on Tuesday but rose more than 2 percent in after-hours trading.
