This content is from: Portfolio

The Morning Brief: Michael Hintze, Steve Cohen, Andrew Rowe and Ralph Whitworth

Michael Hintze’s CQS Directional Opportunities fund is shaping up to be one of the best performing hedge funds in 2012. The $1.6 billion portfolio was up 2.9 percent in December, lifting its full-year gain to 35.9 percent. The fund had a high concentration in corporate credit, equities and convertible bonds. Last year, the fund lost more than 10 percent. But this came after gains of more than 31 percent in 2010 and 56 percent in 2009. In 2012, the CQS Diversified fund, which is sort of a firm-wide fund of funds, investing in the other CQS funds, was up 11.34 percent. We reported last month the founder of the London-based hedge-fund firm is bullish on 2013, as he thinks central bank stimulus should continue to boost credit and equity markets. He also believes the U.S. economy could pleasantly surprise many investors in 2013, driven in part by continuing recovery in the housing market and the rebuilding of bank balance sheets.


Steve Cohen’s SAC Capital is reaching a cross-roads of sorts. The hedge fund firm expects to lose $1 billion, or 17 percent of its clients’ assets when redemptions are finalized on February 15. The firm, which manages a total of $14 billion, has just $6 billion in outside money. The remaining $8 billion is either Cohen’s money or SAC employee capital. Investors, especially institutions that are fiduciaries, are apparently becoming more concerned with maintaining an investment in the firm when it seems like government regulators are poking around its operations.


Activist Relational Investors LLC, which stresses it is not a hedge fund, has worked out an agreement with PMC-Sierra whereby the investor will be able to appoint one director to serve on the company’s Board of Directors and on its Compensation Committee. Under the deal, Relational can appoint Co-Founder Ralph Whitworth, or Kirt Karros, a Principal and Managing Director. If either one of the two individuals joins the board PMC-Sierra also must nominate him for the 2014 annual meeting as well. Re4lational owns 8.8 percent of the total shares outstanding.


Another hedge fund is shutting down. Andrew Rowe’s SandRidge Capital LP is closing despite posting an 11 percent gain in 2012. The commodity hedge fund, which has $320 million under management, mostly traded North American natural gas futures and derivatives. Three of SandRidge's gas traders are reportedly moving over to Goldfinch Capital Advisors, which is headed by former Centaurus Energy trader Michael Maggi.

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