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The Morning Brief: Metacapital’s Humbling Moment; Highbridge’s Real Estate Venture

Metacapital Management’s Deepak Narula, one of the top performing hedge fund managers last year, has been humbled by the markets. His flagship fund, which was up 41 percent last year, is down 5.66 percent for the year through June 14, according to one report. Narula, who qualified for the Institutional Investor’s Alpha Rich List’s second team after making $125 million last year, has been hurt by the big sell-off in bonds over the past five or six weeks.

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Highbridge Principal Strategies is teaming up with Related Companies, a real estate development and investment firm, to manage a new real estate credit investment platform. The two firms will invest $800 million in available capital primarily in real estate debt, specifically gap financing for real estate projects in transition across the United States. The platform plans to invest in first lien mortgages, mezzanine loans, and preferred equity positions in both land deals and non-stabilized assets, focusing on re-development, conversions and new construction. Brian Sedrish will serve as portfolio manager for the joint venture. He was previously head of acquisitions for the commercial real estate division at Deutsche Bank, where he was responsible for the purchase of distressed debt, the acquisition of non-performing and sub-performing pools of mortgages and the origination of high-yield loans across the United States. HPS is a subsidiary of the New York-based hedge fund firm Highbridge Capital Management and J.P. Morgan Asset Management.

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Bank of America Merrill Lynch is still bullish on the Japanese stock market, stressing it is too soon to give up on Abenomics. In a new research note, it told clients it expects stocks to rise toward year-end. “We believe it is premature to doubt the long-term impact of the government’s policies,” it states in the report. “We expect the market to rise by year-end on improved central bank communications with the market, an improvement in the economic data and expectations for bonuses.” This said, BofAML does expect a flat period in the third quarter. Its year-end forecast for the Nikkei is 15,000-15,500.

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Apple closed at $398.01 on Wednesday, the first time it finished below the magic $400 level in two months. Although many hedge funds bailed out of the stock or trimmed back their positions, it is still a big favorite among the investor group.

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