The Morning Brief: Hess and Elliott Call a Truce; Tepper's Still Bullish

Just two days before its annual shareholder meeting, Hess and activist investor Elliott Management have proposed ways to settle their differences. The energy company pledged to add two of Elliott’s nominees to its board of directors, even if all of the company’s five candidates win election. Elliott proposed that all of its nominees and all of the company’s chosen nominees form a newly constituted board, and then the two sides could subsequently decide on the size and composition. The annual meeting is scheduled for Thursday, May 16.

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Daniel Loeb’s Third Point is calling on Sony to sell up to 20 percent of its entertainment business in an initial public offering. This will enable the Japanese company to focus on electronics, according to a letter to Third Point investors obtained by Bloomberg. Sony told the wire service the businesses are not for sale. The Third Point Offshore Fund’s U.S. dollar shares were up 15.2 percent through May 8, while the British sterling shares were up 16.5 percent.

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Appaloosa Management’s David Tepper — who topped the Institutional Investor’s Alpha Rich List ranking of top-earning hedge fund managers this year after making $2.2 billion in 2012 — told CNBC his bullishness on stocks has not wavered. He also said not to worry about the Fed killing the stock market rally by reining in its bond-buying program. Tepper figures there is something like $400 billion looking to be invested and stocks are one of the best places. He says now is a bad time to be short because there is so much cash looking for a place to go.
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The U.S. stock portfolio at Richard Perry’s New York hedge fund firm Perry Capital rose slightly at the end of the first quarter, to a little more than $3.1 billion. About one-sixth of the portfolio was a put on the exchange traded fund that tracks the Russell 2000 index, or one and a half times the size of this position at the end of the year. His largest long holding was American International Group, even though he trimmed the size of the position to 13.16 million shares.

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Stephen Mandel, Jr.’s Lone Pine Capital had $19.2 billion in equities at the end of the first quarter, up from 15.9 billion three months earlier. The Tiger Cub’s largest positions by far were Priceline.com and Google. Retailers Dollar General and Gap were a distant third and fourth, respectively.

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Tiger Cub O. Andreas Halvorsen’s Viking Capital held an initial position of more than $1 billion in Boeing at the end of the first quarter. Altogether, the firm — which runs both long-short and long-only funds — had nearly $16.7 billion in equities.