Hot Hedge Fund Activity February 28th
Wing Chau Sues Steve Eisman, Michael Lewis, and W.W. Norton & Company (Bloomberg)
Wing Chau, a manager of collateralized debt obligations, according to a complaint filed Feb. 25 in Manhattan federal court, claims the book unfairly casts him as one of the “villains” responsible for the 2008 financial collapse. The book “depicts Mr. Chau as someone who ignored his professional responsibilities, made misrepresentations to investors, charged money for work that was not performed, had no stake in the CDOs he managed, was incompetent or reckless in carrying out his responsibilities, and violated his fiduciary duties by putting the interests of ‘Wall Street bond trading desks’ above those of his investors,” according to the complaint. Also named in the suit, which seeks unspecified damages, are the book’s publisher, W.W. Norton & Co., and Steven Eisman, managing director of FrontPoint Partners LLC, whom Chau describes in the complaint as “one of the principal sources Lewis relied on in writing ‘The Big Short.’”
St. Joe shakes up board amid shareholder pressure (WSJ)
St. Joe (NYSE:JOE), the largest landowner in Florida, said Monday its CEO and three board members have resigned amid pressure from the company’s largest shareholder. Britt Greene, who has been with St. Joe for 13 years, will step down from his president and CEO roles later this week, the company said. Michael Ainslie, John Lord and Walter Revell will resign from the board. To replace them, St. Joe (NYSE:JOE) will add four new directors proposed by mutual fund Fairholme. That includes Fairholme President Bruce Berkowitz, executive Charles Fernandez, former Florida Gov. Charlie Crist and Carnival Corp. (NYSE:CCL) COO Howard Frank. The other three members are Hugh Durden, Thomas Fanning, and Delores Kesler.
SAC Private Equity Division To Spin Off (FinAlternatives)
The division’s heads have founded a new firm, Siris Capital, with plans to begin raising their independent debut fund. Siris will focus on technology, telecommunications and healthcare investments, although areas outside of this comfort zone will not be ruled out. The new firm, backed by SAC’s Steven Cohen, hopes to raise $400 million for its Siris Partners II, The Wall Street Journal reports. How much of that will come from Cohen is unclear.
Azentus Capital Has Picked UBS (NYSE:UBS), Goldman (NYSE:GS), and Morgan Stanley (NYSE:MS) As Prime Brokers (Reuters)
Former Goldman Sachs Group Inc (NYSE:GS) star trader Morgan Sze has picked UBS (NYSE:UBS) along with Goldman (NYSE:GS) and Morgan Stanley (NYSE:MS) as prime brokers for the $1 billion-plus hedge fund he plans to launch in the second quarter, two sources familiar with the matter said. The selection was a highly anticipated event in the region’s investment banking market, as Sze’s fund launch is one of the largest Asia hedge fund launches ever, and one expected to dish out millions of dollars in fees. Banks including Deutsche Bank and Credit Suisse fiercely competed for the mandate. While Goldman (NYSE:GS) and Morgan Stanley (NYSE:MS) were expected to get picked, the choice is a major breakthough for UBS (NYSE:UBS), a bank trying to build its prime broking business in Asia.
Activist Hedge Fund Managers Eye CEOs Sitting on Piles of Cash (II Magazine)
They’re back. Activist hedge fund managers, who agitate to force out entrenched company managements, are in fighting form for the 2011 proxy season and stalking companies hoarding cash. “You’re seeing more attention paid to activism, given corporate balance sheets’ cash reserves,” says Jason Orchard, a principal with Spring Mountain Capital, a New York–based investment management firm that focuses on alternative assets and invests with activist and event-driven funds. “Companies are still a little leery on this recovery, but they have so much cash.”
This is a guest post written by Insider Monkey.