The Morning Brief: Trump and Elliott’s Singer are Now BFF

February 17, 2017   Stephen Taub


“He was a very strong opponent,” President Trump said. “Now he is a very strong ally.”

President Trump has a new hedge fund friend. Trump said at his Thursday press conference that he met with Elliott Management founder Paul Singer at the White House and all is good. "He came up to the office," Trump said. "He was a very strong opponent. Now he is a very strong ally." Singer foreshadowed his change of heart when he attended a fundraising breakfast hosted by Trump at New York’s Cipriani, according to a CNBC report at the time. The cable network also said Singer was giving a substantial amount of money to Trump’s inauguration. During the presidential campaign, the longtime Republican supporter was one of the most vociferous never-Trumpites. He gave $1 million to Our Principles PAC, which tried to prevent Trump from becoming president. He initially supported Marco Rubio and made it clear he had no plans to support Hillary Clinton. Sitting on a panel at the Aspen Ideas Festival in Colorado at the beginning of the summer, Singer said: "The most impactful of the economic policies that I recall him coming out for are these anti-trade policies. And I think if he actually stuck to those policies and gets elected president, it’s close to a guarantee of a global depression, widespread global depression."

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Hedge fund investors did it again. Many got out when it may have been time to get in. This is what new data suggest from Preqin, which reported that hedge funds suffered $110 billion in net redemptions last year at the same time the average fund posted its best gain since 2013. In fact, $43 billion of the net withdrawals took place in the final quarter, the fifth straight quarter of net redemptions, according to the report. Frustrated investors were probably reacting all year to the mostly mediocre performance posted by hedge funds since the financial crisis. However, thanks to fairly decent performance industry-wide assets under management rose to a record $3.25 trillion in 2016. Preqin reports the majority of the outflows in the fourth quarter—and 46 percent of the total for the year--came from equity strategies.

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Corvex Management nearly doubled its stake in Pandora to 20.76 million shares, or 8.8 percent of the streaming music company, according to a new regulatory filing. At year-end, the activist headed by Keith Meister also held a position in Pandora’s convertible bonds. Corvex also warned the company in its Thursday regulatory filing that, in effect, it is watching closely and may take some sort of undefined further action.

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Marcato Capital Management disclosed its Marcato Special Opportunities Master Fund LP bought 26,100 shares of Buffalo Wild Wings, mostly for $156.63 per share, bringing the San Francisco activist’s total stake in the casual dining company to 5.6 percent. In a separate regulatory filing, Marcato said Marcato International Master Fund Ltd. sold 325,000 shares of Trinity Place holdings at $7.50 per share on February 14, and unloaded 6,300 shares at $7.83 each on February 15. Even after the sales, the firm still holds 16.5 percent stake in the real estate company.


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