Hedge Fund News Wrap: Week Ending 8/8/14

Hedge Fund Performance: Funds Fall in July

eVestment cites July as a volatile month for financial markets, in large part due to Europe’s instability, and escalating conflicts in Ukraine and the Middle East.finance1

In July, hedge funds fell 0.88 percent according to the HFRX Global Hedge Fund Index. For the past seven months, hedge funds have been up only 0.87 percent this year. Although July’s declines were not far off from the Standard & Poor’s 500 Index, hedge funds still remain far behind the broader market this year.

Master-limited partnerships were July’s worst performers, shedding 2.97 percent last month. Macro funds, commodity trading advisers, emerging markets, equity market neutral, and convertible arbitrage funds were the best performing strategies for July.

From eVestment Report July 2014


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Allergan Sues Valeant and Ackman, Claims Insider Trading

Botox maker, Allergan, is suing Valeant Pharmaceuticals and William Ackman’s Pershing Square over their takeover attempt, citing insider trading and other fraud before the plan became public.

According to the New York Times, the lawsuit is the most aggressive move yet in the takeover battle, and puts the spotlight on Ackman’s 9.7 percent stake in Allergan, which he amassed as he prepared to make a bid with Valeant.

The value of Pershing Square’s stake jumped $1.2 billion once the takeover bid became public, according to Reuters.

This is a shameless attempt by Allergan to delay the shareholder’s fundamental right to call a special meeting,” said Ackman in a statement. “Allergan’s determination to waste money on a lawsuit against its largest shareholder further demonstrates why this board of directors should be removed.”

The special shareholder’s meeting would help rally support to remove Allergan’s “poison pill” measure.

Valeant’s chief executive, J. Michael Pearson, echoed Ackman’s concerns, “We are disappointed that Allergan continues to stand in the way of its shareholders’ right to voice their views on a transaction with Valeant. Despite Allergan’s attempted roadblocks, we remain committed to pursuing this compelling combination, which will create an unrivaled platform for growth and value creation.”

The lawsuit was filed by Allergan in the United States District Court for the Central District of California.


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USA Today




Argentina Sues the United States Over Hedge Fund Debt

On Thursday, Argentina asked the world court in The Hague to take action against the United States over Argentine sovereign debt, which stems from its economic default in 2001 and another one again this year. Currently, Argentina owes $539 million to restructured bondholders in interest, on top of the $1.5 billion that investors are claiming they are owed.

The International Court of Justice said that the request had been “transmitted to the U.S. Government. However, no action will be taken in the proceedings unless and until Washington accepts the court’s jurisdiction.”

According to the request, Argentina said that the United States had “committed violations of Argentine sovereignty and immunities and other related violations as a result of judicial decisions adopted by U.S. tribunals.”

Although Argentina has failed to reach an agreement with bond holders, it is possible that international banks may broker a deal to buy debt from the holdouts as early as next week, according to reports from CNBC.


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The Guardian