Hedge Fund News Wrap: Week Ending 05/15/15

Blackstone Buys Minority Stake in Hedge Fund Magnetar Capital

(DealBook) – The Blackstone Group is taking a minority stake in Magnetar Capital, the $13.6 billion hedge fund run by the former Citadel trader Alec Litowitz.

It is the latest deal for the hedge fund arm of Blackstone, a unit run by J. Tomilson Hill. Blackstone, based in New York, has been building up a portfolio of minority stakes in hedge funds and has raised more than $3 billion to do so.

Magnetar said the deal would help it expand. It added that it would retain full control of the business. It did not disclose the financial terms of the deal.

“Blackstone’s investment provides a catalyst that will help us achieve the firm’s strategic objectives, which include continuing to attract and retain key talent, increasing our investment in our funds and deepening our relationship with a leader in the alternative asset management sector,” Mr. Litowitz said in a statement.

Read the entire article at DealBook
More coverage: The Wall Street Journal and FINalternatives

DuPont Wins Board Proxy Fight against Activist Investor Peltz

(Reuters) – DuPont repelled a board challenge from activist investor Nelson Peltz on Wednesday, dealing him a surprising blow after shareholders backed all 12 directors nominated by the U.S. chemical conglomerate’s management.

Peltz’s Trian Fund Management had sought four seats on the board, including one for himself, and had pushed the 213-year-old company to split its businesses to unlock more value for shareholders.

DuPont stock closed down 6.8 percent at $69.33, making it the top percentage loser in the Standard & Poor’s 500 index .SPX. This was the stock’s biggest single-day decline since October 2012, and, with 33.5 million shares changing hands, this was the busiest trading day in the company’s history.

The vote ends a high-stakes corporate drama that revved up in January when Trian announced its dissident slate. The hedge fund holds a 2.7 percent stake in DuPont, making it the company’s fifth-largest shareholder.

Read the entire article at Reuters
More coverage: The Financial Times and CNBC

Argentina Sues Citigroup over Debt Repayments

(The Guardian) – Citigroup has said it has been sued by Argentina and that some employees could face criminal charges there due to a court battle between the South American nation and US hedge funds.

Argentinian officials have since late March “taken certain adverse actions against Citi Argentina, including filing a lawsuit against Citi Argentina and instituting a suspension of certain activities”, the US bank said in a filing with the Securities and Exchange Commission.

Additional potential sanctions include “the loss of licences to operate in Argentina and criminal charges against bank employees”, Citigroup added.

Citigroup’s travails come amid longstanding litigation between Argentina and US hedge funds NML Capital and Aurelius Capital Management, which did not accept a restructuring deal of Argentinian debt. The funds seek $1.3bn (£830m) from Argentina.

Read the entire article at The Guardian
More coverage: Bloomberg News and Reuters