Archive for the ‘Uncategorized’ Category

Tiffany Glitter Continues for Peltz

February 22, 2011

Chidem Kurdas

Long-term activist investors take big risks but when they win, they win big.  The bet Nelson Peltz’s Trian made on Tiffany demonstrates this. (more…)

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Angelo Gordon Steel Turnaround

January 3, 2011

Chidem Kurdas

When Angelo, Gordon & Co. lent to United States Steel Corp. in the Spring of 2009, the steel maker was in serious trouble. The steel business slumped in tandem with construction. US Steel’s stock went into a tailspin after hitting a high of $187 in late 2008. It has not recovered; it is fluctuating around $60 now.  Yet Angelo, Gordon did well with the US Steel notes. (more…)

Cerberus SPV Makes High Return

December 30, 2010

Chidem Kurdas

Long-suffering clients of Stephen Feinberg’s Cerberus Capital Management received good news this fall—an early holiday gift, you might say.  It concerned the special-purpose vehicle set up to contain assets that became toxic and just about unsellable in 2008-2009.  (more…)

Distressed Credit Woes Influence Investors

December 8, 2010

Once burnt, twice shy, goes an old adage. Bad experience with distressed credit investments – considered very promising at the start of the real estate downturn – has put fund clients off this strategy. (more…)

Peltz Stays with Financials

November 19, 2010

Apparently Nelson Peltz likes banks and asset managers. Legg Mason, the fund management company, is one of the three big stakes he continues to hold and he’s bought other  financial services businesses as well. (more…)

Replicator Beats Managers

October 25, 2010

An index that tracks reproducible hedge fund performance had significantly higher return than actual hedge funds in the period that started January 2008. Boris Arabadjiev, chief investment officer of the Credit Suisse fund of hedge funds group, found that this replicator outperformed underlying hedge fund strategies by as much as three to five percentage points.

What does it mean? (more…)

Andrew Lo Counts Uncertainties

June 8, 2010

Chidem Kurdas

If risk measures misled investors about mortgage-linked securities, what is wrong with the measures? Professor Andrew Lo of MIT offered a list of what’s missing from quantitative risk models. The root cause of the trouble, he suggests, is physics envy! (more…)

Tiffany Sparkles in Nelson Peltz Hedge Fund

May 27, 2010

Chidem Kurdas

Diamonds are really forever, it turns out, despite a Great Recession and all. That’s how it looks from the stake activist investor Nelson Peltz took in Tiffany & Co. (more…)

Cramer, KKR, Cooperman and Converts

May 25, 2010

Chidem Kurdas

Last Friday Jim Cramer recommended KKR Financial Holdings, the publicly-traded credit vehicle from private equity giant Kohlberg Kravis Roberts. The investment idea came with a couple of warnings.

One, it is speculative. They borrow money to buy debt, Mr. Cramer said. They buy primarily below-investment-grade debt as well as distressed or stressed paper.

Two, the main reason Mr. Cramer says he went for KKR Financial is insider buying—-by KKR chief executive William Sonneborn and notably by Leon Cooperman, long-time equity investor and head of Omega Advisors. Surely a good sign.

Mr. Cooperman is a substantial shareholder. The striking thing, though, is something Cramer did not mention. (more…)

Repo Credit Lesson from Paulson Auditorium

May 24, 2010

Chidem Kurdas

A broker does a repurchase transaction with a hedge fund. Mortgage-backed securities are the collateral. The fund get short-term financing; the broker holds the securities. This market broke down in 2008 and never recovered to pre-crisis levels. What happened? (more…)