This content is from: Portfolio

The Morning Brief: Julian Robertson's Hedge Fund Warning; More Paulson Investors Losing Patience

John Paulson is no longer getting an extra pass for his disappointing results. Several major investors are reportedly pulling money from his funds just days before the deadline for submitting redemption requests.

More news related to the government’s insider trading scandal involving Raj Rajaratnam: Kris Chellam, the former CFO of technology company Xilinx and a former Galleon Management portfolio manager, agreed to pay more than $1.75 million to settle Securities and Exchange Commission charges that he illegally passed on critical information to the convicted hedge fund manager. According to the complaint, in late 2006, Chellam tipped off Rajaratnam that Xilinx's business was worsening, which was opposite the company's prior public projections. Thanks to Chellam's tips, Rajaratnam’s Galleon hedge funds shorted Xilinx stock and made nearly $980,000. In May 2007, Chellam became the co-managing partner of the Galleon Special Opportunities Fund, a venture capital fund, where he stayed until April 2009.

Tiger Management’s Julian Robertson warns that hedge funds positioned to benefit from a disaster are going to get hurt badly. “I think right now they are all scared,” Robertson told Bloomberg. “They are really only going to be profitable in the event of a big disaster.”

Carl Icahn is rebuffed again. Oshkosh rejected his $3 billion hostile takeover offer and instituted a poison pill to help fend off the septuagenarian investor.

Jeffrey Smith’s Starboard Value LP, perhaps the busiest activist investor these days, upped its stake in Progress Software to 8.7 percent. In the past month, he has been a buyer under $19 and a seller over $21. 

Another top portfolio manager at a major Boston hedge fund is leaving to start his own firm.  Matthew Sidman, who has worked at Highfields Capital for 15 years, plans to leave next year and launch his own firm. Highfields, headed by Jonathon Jacobson, manages about $11.6 billion. Earlier this week Herb Wagner said that at the end of the year, he will leave Baupost Group, the $25 billion firm where he has worked for 13 years.

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