The Morning Brief: Paulson Launches New Funds; Ackman Gets Boost from Soros Bet

John Paulson is looking to raise money for a private-equity fund that would invest in real estate, Bloomberg reports. The fund is to be called Paulson Real Estate Fund II LP, according to a filing with the Securities and Exchange Commission on April 22. The fund and its offshore counterpart have not yet raised any money, according to the filing. The firm earlier said it is planning to launch the Paulson Partners Premium LP Fund, a risk-arbitrage fund geared toward investors who are “looking to mitigate income taxes,” according to a report.
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Good news for Pershing Square Capital Management’s William Ackman. Soros Fund Management reported after the market closed Thursday that it owns 7.91 percent of the shares of J.C. Penney, giving a boost to Ackman’s losing bet on the retailer. The 13G filing, which indicates the Soros investment is passive, was dated April 15. The stock surged 5 percent to $16 in after hours trading after climbing 0.33 percent in the regular trading session.
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Hedge funds of funds may have caught a much-needed break. The average multi-manager fund climbed 3.16 percent in the first quarter of the year, the best three-month period since the first quarter of 2012, according to Preqin. That performance also was just shy of the 3.35 percent gain posted by the average single-manager fund, according to the London-based alternatives data gatherer. Long-short funds led all hedge fund strategies with a 4.43 percent gain, followed by event-driven (3.81 percent). Long bias hedge funds gained 7. 99 percent for the quarter, short of the 10 percent return for the S&P 500.
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Deutsche Bank heavily credits activist hedge fund firm Elliott Management for the recent rise in the shares of energy giant Hess, to around $70 a share. “Management, in the face of formidable activism, has acted with an urgency and clarity of strategy well beyond previous levels,” it told clients in a note on Thursday. “A dividend that didn’t budge for a decade suddenly rose 150 percent.” It also lauded the fact that non-core assets “sitting in the dusty Hess attic” were quickly sold. The investment bank is eagerly anticipating the company’s latest results at the May 17 annual meeting, where Elliott is putting up its own slate of directors. “Hess will be a better company…regardless of who wins the proxy,” the report states, calling it a “win-win for investors.” It reiterated its Buy recommendation and $80 target price.