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Asia fund management myth-buster
Asset Management
<p>A recent AsianInvestor survey of the biggest institutional fund managers across Asia-Pacific dispelled several misconceptions:</p> <p>They are not home-bound and instead have a strong appetite for global market exposure; they are willing to explore alternatives rather than stick to traditional assets; and there is little sign that they are switching to passive investment strategies.</p> <p>So, Asian fund managers are dynamic, experimental and keen to take on the world. They’re also a social lot and keen to share.</p> <p>“Respondents are as happy to invest directly and to co-invest with general partners and peers as they are to take a fund-of-funds approach, and they are ready to outsource more to local partners,” notes AsianInvestor. (paywall)<br /> Photo: Mandala Travel<br /> &nbsp;</p>
Pershing Square is down 15.9% for the year
Hedge Funds
<p>Looks like Ackman picked the wrong week to start doubling down on Valeant.<br /> “Pershing Square Holdings, the publicly traded fund run by hedge fund billionaire Bill Ackman, is having a brutal year.</p> <p>The fund is down 15.9% through October 27, according to a performance update. The fund had been down 11.2% a week ago.</p> <p>The fund's performance was primarily dragged down by its largest equity holding, Valeant Pharmaceuticals.”<br /> Pershing Square was up as high as 11% in August, and as Business Insider points out, it was one of the best-performing hedge funds in 2014 with a return of 40.4%.<br /> Photo: marc falardeau</p>
If you see David Einhorn, give the man a high-five
Hedge Funds
<p>After shorting St. Joe the past eight years, the man just saw the SEC hand him one of his greatest victories:<br /> “The Securities and Exchange Commission today charged The St. Joe Company, a Watersound, Florida-based real estate developer and landowner, its former top executives, and two former accounting department directors, with improperly accounting for the declining value of its residential real estate developments during the financial crisis. As a result of this misconduct, St. Joe reported materially overstated earnings and assets in 2009 and 2010.”<br /> As for Bruce Berkowitz – whose latest 13D shows him owning 32.3% of St. Joe – it might be best to give him a hug.<br /> Photo: Insider Monkey</p>
Golden Gate Ventures bets big on Thailand payments startup
Venture Capital
<p>Singapore-based early stage investor Golden Gate Ventures has just made its biggest bet in Southeast Asia yet, an online payments gateway in Thailand called Omise.co.</p> <p>Set up in 2013 by Japanese CEO Jun Hasegawa, Omise is still a relatively new kid on the block, but this is now its second round of institutional funding.  It raised a $2.3 million Series A round investment earlier this year. Golden Gate will not disclose how much it has invested, but the firm's average ticket size is  normally around seven-figures.</p> <p>Ecommerce has been experiencing a renaissance in Southeast Asia for the past couple of years now with major international players like German incubator Rocket Internet, and Japanese internet giants Softbank and Rakuten, backing a slew of  startups. Ecommerce-related payments and logistics solutions are still is lacking however.</p> <p>Omise is trying to lighten the load by offering a simple plug-and-play interface for software developers that make it easier to accept credit card payments.</p> <p>Golden Gate says that Omise grew 56% in Q2, and 269% in Q3. The firm estimates that at this rate the firm will be processing hundreds-of-thousands of monthly transactions in 2016.</p> <p>A big part of this strategy will be Omise's overseas ambitions. Part of the funding will be used for expansion into Indonesia and Singapore, the startup also has it eyes set on Hasegawa's native Japan.</p> <p>We can expect a lot more big deals coming from Golden Gates. The firms raised $50 million for its second fund in the summer and it has a lot more dry powder to burn through. </p> <p>Photo: Tiago Almeida</p>
Elliott discloses huge stake in Cabelas Inc (CAB); stock surges
Hedge Funds
<p>The shares of Cabelas are trading higher after Elliott Associates (referred to as Elliott), and its wholly-owned subsidiaries disclosed a significant stake in the company.</p> <p>The stock price of Cabelas surged almost 20% to $39.99 per share at the time of this writing around 12:12 in the afternoon in New York. Cabelas is a specialty retailer and direct marketer of camping, fishing, hunting, and other outdoor related products.<br /> Elliott’s investment in Cabelas<br /> Based on its 13D filing with the Securities and Exchange Commission (SEC), Elliott acquired 11.1% of the outstanding common stock of Cabelas.</p> <p>The filing indicated that Elliott beneficially owned 1,962,321 shares or approximately 2.8% of the outstanding common stock of Cabelas. Elliott International and Elliott International Capital Advisors (EICA), each beneficially owned 2,202,679 shares or 3.2% of the outstanding common stock of the specialty retailer.</p> <p>Elliott, Elliott International and EICA collectively, beneficially owned 4,165,000 or 6.0% of the shares of the outstanding common stock of Cabelas.</p> <p>The firms have economic exposure comparable to approximately 5.1% of the outstanding common stock of the company under the Derivative Agreements.</p> <p>Under the Derivative Agreements, Elliott and Elliott International have economic results comparable to the economic results of ownership but do not have the power to vote or direct the voting or dispose of or direct the disposition of the shares that were referenced in the agreements.<br /> The firms have a collective voting power of approximately 6% of the outstanding common stock of the company.<br /> Elliott may formulate plans/proposals for Cabelas in the future<br /> Elliott acquired a stake in Cabelas because of its belief that its stock” was “significantly undervalued by the public market and represent an attractive investment opportunity.”</p> <p>The activist hedge fund believed that the company has multiple ways to unlock unrealized value, and it may seek to engage in a constructive dialogue with the Board of Directors of the company regarding opportunities to maximize shareholder value.</p> <p>Currently, Elliott has no plans or proposals to Cabelas. However, the activist hedge fund said it may express its views to the Board and management of the company from time to time in the future as it continues to review its investment.</p> <p>Elliott said it might in the future formulate plans or proposals regarding the company’s business, strategies, assets, corporate governance, Board of Directors composition, and other issues to enhance shareholder value.</p> <p>The shares of Cabelas traded between $33.03 and $58.90 per share. The company lost 25% of its stock value year-to-date.</p> <p>This article was originally published by ValueWalk. <br /> Photo: Zach Dischner</p>
Passive management: 1, Active management: 0
Asset Management
<p>Nine out of 10 actively managed European equity funds have underperformed their benchmark over the last 10 years, reports the Financial Times. Three-fourths of active U.K. equity managers continually fell short of their benchmark in the last decade. Less than half of the 489 U.K. equity funds and 1,192 European equity funds launched 10 years ago are still around.</p> <p>So active managers, are you worth your fees?<br /> Photo: Hans Gerwitz </p>
The scariest thing for investors this Halloween: volatility
Asset Management
<p>Volatility has become the zombie of the markets, lurking like the undead in the corners, waiting for its chance to suck the life out of a portfolio. Or at least that's how investors feel.</p> <p>More than half, or 55%, of financial advisors told Eaton Vance in a recent survey that protecting client wealth from volatility has become increasingly important in the last year. "Volatility's unpredictability has made investors uncomfortable in the current market environment and reduced confidence in their ability to reach their goals," says John Moninger, managing director at Eaton Vance, in a press release.</p> <p>Volatility doesn't have to mean the end of the world, says Eddie Perkin, Chief Equity Investment Officer at Eaton Vance, at an event Tuesday. "History has shown that the best opportunities tend to present themselves when uncertainty is running high," he says. The bears hawk volatility as a warning signal. "We're still living with the 2008 financial crisis," says Perkin. The Great Depression effected an entire generation, and it should be expected that 2008 will do the same. Pure equity funds have been in nothing but outflow-mode, he says. "There's still a lot of fear out there and I don't think it's going away any time soon."</p> <p>The financial advisors vary in just how scary they think the volatility is. For 39% this volatility is somewhat likely to lead to a bear market. Another 16% say it most likely will mean a bear market. But 38% say a bear market isn't likely at all. Some of the divide comes from the age of the investors. Younger adviors are more likely than their baby boomer counterparts to see an impending bear market, Eaton Vance found. Women too are much less bullish than male advisors.</p> <p>People need to focus on earnings and interest rates, says Richard Bernstein, CEO and CIO of Richard Bernstein Advisors, speaking at the Tuesday event. "Everything else that people are worried about is completely irrelevant," he says. It helps to know what to expect from earnings and interest rates. For instance, when interest rates go up, stocks get hurt. That shouldn't shock anyone.</p> <p>Fear is currently overriding greed in investors, and that's not a bad thing, says Bernstein. "[Confidence] leads to stupid things," he says. "When you start reporting how great everything is...realize we're in the eighth or ninth inning."<br /> Photo: Daniel Hollister <br /> &nbsp;</p>
Infographic: Grading 15 tech companies that declined big takeover offers
Venture Capital
<p>If you were to ask legendary investor Peter Thiel about the most important moment in Facebook history, he would point to an exchange in July 2006.</p> <p>Yahoo had made the lucrative offer of $1 billion for Facebook, and Peter Thiel as well as board member Jim Breyer got called into a meeting about the deal with Mark Zuckerberg.</p> <p>Courtesy of: Visual Capitalist<br /> This article was published by ValueWalk. <br /> Photo: Jason McELweenie </p>
Corruption kills entrepreneurship
Venture Capital
<p>On Tuesday night, Nobel Laureate Professor Dan Shechtman spoke at the Hong Kong University of Science and Technology about “How Technological Entrepreneurship Can Be Nurtured”. </p> <p>The distinguished chemist sees five important factors that are keys to promoting get-up-and-go risk-taking:</p> <p>“We need good basic education for everyone. And then we need a good engineering and science education, government policy and support for entrepreneurship, a free market economy, and, most important of all, no corruption, for corruption kills entrepreneurship.”</p> <p>Schechtman’s delivered his lecture at the UC RUSAL President’s Forum and HKUST 25th Anniversary Distinguished Speakers Series. UC Rusal is the world’s second biggest aluminium producer and is controlled by Oleg Deripaska, one of Russia's richest and best-connected oligarchs.<br /> Photo: Fred S.<br /> &nbsp;</p>
Boosting ETFs in Hong Kong
Asset Management
<p>The Hong Kong authorities are rightly jealous of the territory’s status as Asia’s leading financial and commercial center. Its preeminent role as a regional stock trading hub is a major reason why Hong Kong can resist Beijing’s more heavy-handed interference in its affairs.</p> <p>So, it’s important that it doesn’t get left behind as rivals compete to create new products and attract investors and issuers. The latest worry is the failure of Exchange Traded Funds (ETFs) to take off in Hong Kong.</p> <p>A paper published yesterday by a government agency called the Financial Services Development Council (FSDC) calls for looser regulation to rectify the problem.</p> <p>Other recommendations include improving ETF education, promoting use of ETFs in the Mandatory Provident Fund and broadening the product range through cross-listings, reports AsianInvestor. (paywall)</p> <p>“Hong Kong’s leadership position within Asia has been overtaken by Tokyo and Shanghai, as they have introduced more innovative products. Actions must be taken to enhance the competitiveness of Hong Kong’s ETF platform,” warned Laura Chan, chairman of the FSDC.<br /> Photo: Steve Webel</p>