The Morning Brief: Small Hedge Fund Aims to Break Up Mining Giant

Two Fish Management, a little-known hedge fund, is pushing to break up Barrick Gold, according to a Canadian Broadcasting Corporation report. The Zionsville, Indiana-based hedge fund, which owns options in the shares of the Canadian mining giant, is pushing the company to divide along geographic lines, arguing that its current size is undervaluing the stock. “Each distinct business unit has unique political environments, geologies, operating costs, reserve profiles, profitability, capital intensities and growth prospects,” Mike Morris, co-founder of Two Fish, reportedly said in the letter. Barrick Gold’s stock is down nearly 50 percent this year alone thanks in part to huge writeoffs, a dividend cut and a decline in the price of gold.

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Tuesday was a big day for the Dow Jones Industrial Average. Goldman Sachs, Visa and Nike are being added to the widely quoted but not very useful benchmark, replacing Bank of America, Hewlett-Packard and Alcoa. But few of these stocks are hedge fund favorites. Just outgoing stock Bank of America and newcomer Visa rank among the 50 stocks that appear most often in the top 10 holdings of hedge funds, according to a recent Goldman, Sachs analysis of second quarter stock holdings. Keep in mind that HP is up 56 percent so far this year, while BofA is up 26 percent. Alcoa is down more than 7 percent.

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Hedge funds operating in London are in an expansion mode. Bloomberg reports that hedge fund firms have more than doubled the amount of office space they have leased in London’s West End this year compared with all of 2012. Among those expanding are London-based BlueBay Asset Management, New York-based Highbridge Capital Management and New York-based Elliot Management Corp. Hedge funds accounted for 31 percent of office space leased in London’s Mayfair and St. James’s neighborhoods this year, according to the report, citing property company Cushman & Wakefield.

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Tiger Global Management made official what we told you several months ago — it is launching a long-only hedge fund, CNBC reports. The New York City-based fund will be run by Charles (Chase) Coleman III, Feroz Dewan and Scott Shleifer. Last year Coleman made $350 million, ranking number 12 on the Rich List.

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Shares of hedge fund favorite Apple fell more than 2 percent after the company announced upgrades to its iPhone. The stock is down 25 percent in the past year, even though it is up 25 percent since late June. The company introduced two new phones, including one that will sell for $99 and is offered in three colors, called the 5C.

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Mariner Investment Group is going green. The $10 billion alternatives firm announced that it has begun to incorporate environmental, social, and governance (ESG) research, ratings, and screening tools developed by MSCI into the investment processes for one of the firm’s “more significant” multistrategy client mandates. Mariner claims it is one of the first alternative asset managers to use the MSCI ESG research and analytics tools to analyze fixed income and long-short investments. It also said it has become a signatory to the United Nations-supported Principles for Responsible Investment (PRI) Initiative.

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Shares of Herbalife Tuesday hit a new 52-week high before closing a little lower at $67.70, up 3.35 percent for the day.

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