Hedge Fund News Wrap: Week Ending 11/21/14

Alibaba was the most popular stock among Hedge Funds in the third quarter. The company had the largest IPO ever and its stock has shown no signs of slowing down. Mark Yusko of Morgan Creek Asset Management, an early investor, believes that the stock has the potential to rise at a rapid pace to potentially dethrone Apple as the most valuable company. Founder Jack Ma is likely to become even richer when he sell’s Alibaba’s financial services affiliate, the most-used online payment platform in China.

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Business Insider



Sandell seeks TransCanada breakup

Sandell Asset Management is attempting to break up TransCanada to increase the company’s value. The hedge fund contends that the company should concentrate its resources on the oil and gas pipelines, and that owning power plants does not sync up with the rest of the business. TransCanada CEO Russ Girling disagrees with Sandell’s assesstment. “There may be a point in the future where we sell some of our mature power assets for cash to fund our capital program,” Girling explained to Bloomberg. “But to wholesale spin the whole thing out provides us with no cash to fund our capital program and actually eliminates about a billion dollars a year of cash flow that we’re using to fund our capital programs.” The attention from an activist hedge fund may cause the company to increase its dividend or leverage even if it never splits up, raising its financial risk, predicts analyst Phil Adams of Gimme Credit LLC.

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Bloomberg News

The Globe and Mail

Computers Topping Humans at World’s Largest Hedge Fund

The largest hedge fund in the world, Man Group, has had more success with computer-based models than with humans. President Luke Ellis told CNBC that he expects the trend to continue: “The backdrop is more of the same and computers are much better at putting up with more of the same. Humans always want to call a change in the markets.” The environment appears to be stable for the foreseeable future with the world’s largest economies utilizing monetary-easing policies. Owning bonds and betting on the dollar is the less exciting investment strategy but is likely to bring in solid returns for now.

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