A one-foot-wide strip of land in Napeague on Long Island that was meant to sell for $10 instead fetched $120,000 after two financiers engaged in a bidding war for the property, according to a Newsday report. The 1,885-foot-long strip, previously owned by Suffolk County, runs through East Hampton Town from Montauk Highway to the Atlantic Ocean. Marc Helie of New York investment firm Chevalier Investments and Kyle Cruz of New York-based hedge fund firm Centerbridge Partners started the bidding at $1,500. Helie ultimately walked away with the prized property, which will grant him “narrow slivers of property on both the east and west sides of Cruz, who would have to walk on Helie’s property to reach the ocean beach a few hundred feet away,” according to the report. —
Call it the Ackman contrarian trade. Hedge funds are snapping up retailer J.C. Penney’s shares after William Ackman of Pershing Square Management sold out his 18 percent stake in the company following a disagreement with the company’s board, the Wall Street Journal reports. New York-based hedge fund firm Glenview Capital Management said on Tuesday that it now owns a 9.1 percent stake in the company, while Dallas-based Hayman Capital Management disclosed on the same day that it owns a 5.2 percent stake. The news follows last week’s disclosure that New York hedge fund firm Perry Capital owns 8.6 percent of the company. Hedge funds own a combined 21 percent of outstanding Penney’s shares, according to the report.
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A fund-of-funds firm called Common Sense Investment Management had to explain to investors this week that its founder, chief executive and chief investment officer was busted for soliciting the services of a prostitute, CNBC reports. Jim Bisenius was nabbed as part of a sting operation in which police ran website ads for prostitution services in a bid to lure would-be customers. The firm issued a statement to the website Business Insider saying that Bisenius will stay on with the $3.2 billion firm and will deal with the scandal “as the personal matter that it is.”
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Short-selling hedge funds learned the hard way this week that failing to forecast merger deals -- and hedge accordingly -- can be really expensive, according to a Reuters report. Hedge funds who were short Finnish mobile phone maker Nokia lost up to $843 million when Microsoft this week announced its deal to acquire the company, according to the report. Other potential takeover targets in which hedge fund firms have large short positions include Blackberry and Alcatel-Lucent. Hedge funds should heed the Nokia deal as “a healthy reminder that managers need to spread their bets to minimize their risks, instead of taking one big short position,” Christophe Jaubert, CIO of hedge fund strategies at Paris-based Rothschild HDF Investment Solutions, told Reuters.
