What We're Reading ~ Hedge Fund Links 3/28/14

American hedge fund assets hit all-time peak [HF Intelligence]

Tiger Global leads Wall Street pack turning to Silicon Valley [Reuters]

Ben Bernanke dines with hedge fund managers in New York [Forbes]

Hedge funds say it's a stock pickers' market [CNBC]

Apparently there is a 'goldilocks' hedge fund size [Business Insider]

John Paulson is back in the mortgage business [CNBC]

For a new breed of activist investors, tipping others is part of the playbook [WSJ]

Institutional investors lose chasing high hedge fund returns [Financial Standard]

US hedge funds bet on European recovery [The Australian]

UK's largest hedge funds get bigger with 82% of assets [Bloomberg]

Barington Capital asks Darden to consider replacing CEO [HedgeWorld]

Blackstone to reduce stake in SeaWorld [Dealbook]

Lampert stops accepting IOUs from Sears as cash burns [Bloomberg]

Hurt in crisis, TPG pursues smaller deals [Dealbook]

What We're Reading ~ Analytical Links 3/26/14

You need an investing system [Oddball Stocks]

On DirecTV and the future of TV/cable/internet and discussion in comments [BrooklynInvestor]

Margin by any other name [Abnormal Returns]

In investing, know the why [Micro Fundy]

New investing strategy: talk your book [Bloomberg View]

Going beyond fundamentals to make fundamental investing work [Institutional Investor]

Google's Larry Page interviewed by Charlie Rose [AVC]

On the cost of cash [Tufts]

On Tencent vs Alibaba [Tech in Asia]

On Masayoshi Son's Sprint turnaround [WSJ]

Debt crisis nears tipping point [Salon]

Can the Bloomberg terminal be toppled? [Term Sheet]

Slumping fertility rates in developing countries spark labor worries [WSJ]

The search for the next platform [AVC]

Echoes of 2000? Companies rush to list shares while the market is hot [WSJ]

12 West Capital Starts Euroseas Stake

Joel Ramin's hedge fund firm 12 West Capital has filed a 13G with the SEC regarding shares of Euroseas (ESEA).  Per the filing, 12 West now owns 19.6% of ESEA with over 11.1 million shares.

This is a newly disclosed equity position as they didn't hold any shares at the end of 2013.  The filing was made due to activity on March 14th. 

You can view other recent portfolio activity from 12 West Capital here.

Per Google Finance, Euroseas is "a provider of worldwide ocean-going transportation services. The Company owns and operates drybulk carriers that transport major bulks, such as iron ore, coal and grains, and minor bulks, such as bauxite, phosphate and fertilizers. The Company also owns and operates containerships and multipurpose vessels that transport dry and refrigerated containerized cargoes, including manufactured products and perishables."

Berkshire Hathaway to Convert USG Notes into Common Stock

Warren Buffett's Berkshire Hathaway filed an amended 13D with the SEC recently on USG (USG).  Per the filing, they note that the company has issued a notice of redemption on the outstanding aggregate principal amount of notes on April 17th, 2014.

Berkshire's notes are convertible into 87.7193 shares of common stock per $1,000 principal amount of notes owned (based on a conversion price of $11.40 per share).  Berkshire will elect to convert all of the outstanding notes held by them into over 4.9 million shares of USG common stock (the aggregate principal amount of just over $56.1 million).

After this conversion, Berkshire will own over 39 million shares of USG, up from their holdings of 34.8 million at the end of 2013.

You can view additional recent portfolio activity by Berkshire Hathaway here.

Per Google Finance, USG is "a manufacturer and distributor of building materials. The Company produces a range of products for use in new residential, new nonresidential, and residential and nonresidential repair and remodel construction, as well as products used in certain industrial processes. The Company operates in three segments: North American Gypsum, Building Products Distribution and Worldwide Ceilings. The Company’s North American Gypsum manufactures and markets gypsum and related products in the United States, Canada and Mexico. The Building Products Distribution segment consists of L&W Supply. The Worldwide Ceilings segment manufactures and markets interior systems products worldwide."

Maverick Capital Discloses Castlight Health Position

Lee Ainslie's hedge fund firm Maverick Capital has filed a Form 3 and Form 4 with the SEC disclosing a new position in Castlight Health (CSLT). 

Castlight just recently completed its initial public offering (IPO) and shares surged from the IPO price of $16 up to $40 on its first day of trading. 

The Form 4 indicates Maverick acquired 450,000 shares of class B stock at a price of $16 on March 19th.  The Form 3 they filed indicates that each share of class A common stock (which Maverick owns) is convertible into one share of class B common stock at any time after the IPO. 

And after the IPO was complete, each share of Series A preferred stock, Series B preferred stock, Series A-1 preferred stock, Series C preferred stock and Series D preferred stock convert automatically into class A common stock.

Maverick owned stakes in all of those share classes according to the Form 3.  So after all is said and done after the IPO, the main takeaway is that Maverick owns a stake in the newly public Castlight Health.

Per Yahoo Finance, Castlight Health is a company that "offers health information via the internet to inform medical choices and reduce insurance costs."

For more on this manager, be sure to check out Lee Ainslie's interview with Columbia Business School.

John Scully's SPO Advisory Increases Equinix Position

John Scully's investment firm SPO Advisory has filed an amended 13G with the SEC regarding its position in Equinix (EQIX).  Per the filing, SPO now owns 10.4% of EQIX with over 5.1 million shares.

This marks an increase of over 1.18 million shares since the end of 2013.  The filing was made due to activity on March 19th.

Shares of EQIX have seen a ton of hedge fund activity over the past few months.  Some examples include: longtime owner Coatue Management sold its Equinix position, but then Barry Rosenstein's JANA Partners outlined their thesis on EQIX in their Q4 letter.  


About SPO Advisory

John Scully, William Patterson, and William Oberndorf founded SPO Advisory in 1989.  SPO runs a concentrated portfolio of public equities pursuing a value investing strategy.  Some of their other top holdings at the end of 2013 included Charles Schwab (SCHW), Liberty Global (LBTYK), and Pioneer Natural Resources (PXD).

About Equinix

Per Google Finance, Equinix is "connects businesses with partners and customers worldwide through a global platform of data centers. The Company connects approximately 4000 customers, across the Americas, Europe, Middle East and Africa (EMEA) and Asia-Pacific. Platform Equinix combines international business exchange (IBX) data centers, a global footprint and ecosystems. The Company offers each customer a choice of business partners and solutions based on their colocation, interconnection and managed IT service needs. Equinix offers customers direct interconnection to an aggregation of bandwidth providers, including the Internet Service Providers (ISPs), broadband access networks and international carriers. Its customers include carriers and other bandwidth providers, cloud and information technology services providers, content providers, financial companies and global enterprises."

Elliott Management Boosts F&C Asset Management Stake

Paul Singer’s hedge fund firm Elliott Management has increased its stake in F&C Asset Management (LON: FCAM). At the end of February, we noted that Elliott held the equivalent of 11% of FCAM’s voting rights.

But now due to trading on March 19th, Elliott has increased the position to 17.5%, with the whole position again held via contract for difference (CFDs/ derivatives).

Per Google Finance – “F&C Asset Management plc (F&C) is an asset management company.  The Company operates in three segments: F&C, F&C REIT and Thames River Capital (TRC). The  Company’s clients are insurance companies, institutional, retail and wholesale investors. The  Company manages portfolios across multiple asset classes on behalf of a range of clients including  insurance funds, pension schemes, public authorities and charities as well as private individuals through savings schemes, investment trusts and mutual funds. The Company’s subsidiaries include  FP Asset Management Holdings Limited, F&C Asset Management Services Limited, ISIS Investment Manager plc, F&C Managed Pension Funds Limited and F&C Treasury Limited.”

Last Chance: $500 Discount to the Value Investing Congress Expires Tomorrow

Just a reminder that this is your last chance to take advantage of Market Folly's discount to the Value Investing Congress in Las Vegas. The discount expires tomorrow!

Our readers can save $500 by using this discount code: FOLLY2

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Hedge Fund Managers Speaking in Vegas

- Eric Sprott, Sprott Asset Management
- Lisa Rapuano, Lane Five Capital
- Carlo Cannell, Cannell Capital
- Tom Russo, Gardner Russo & Gardner 
- Sahm Adrangi, Kerrisdale Capital
- Whitney Tilson, Kase Capital
- Daniel Miller, Gabelli Funds 
- Zeke Ashton, Centaur Capital Partners
- Isaac Schwartz, Robotti & Co
- David Hurwitz, SC Fundamental
- Michael Kao, Akanthos Capital
- Albert Yong & Chan Lee, Petra Capital
- John Lewis, Osmium Partners 
- Tim Eriksen, Eriksen Capital
- Dan Ferris, Extreme Value 
- Chris Mayer, Agora Financial
- David Neuhauser, Livermore Partners 
- Richard Lashley, PL Capital
- Arnaud Ajdler, Engine Capital  - Eric Andersen, Western Standard 
- Mystery short-seller: "The Sleuth of Wall Street"


Event Details

Where:  Encore at Wynn, Las Vegas

When:  April 3rd & 4th

Why:  The press isn't allowed at this event, so get to Vegas to hear the latest investment ideas from various hedgies.  Ask the managers questions about their pitch, network with other investors and since it's Vegas, stay the weekend and extend the fun.


Last Chance To Use The $500 Discount

The discount for our readers expires tomorrow.  If you're thinking about attending (especially if you're on the West Coast), take advantage before the discount disappears.

Click here to save $500 and use discount code: FOLLY2