Collapsed hedge fund Columna sues Permira-backed former managers

BlueMountain names slate for PG&E board

LONDON (Reuters) – The new managers of Columna Commodities Fund, a Luxembourg hedge fund which went into liquidation in early 2017, have said they are suing its former managers Alter Domus for $56 million in lost assets and fees.

Columna, launched in 2013, was a top-performing fund in a stable known as LFP I SICAV, managed by Luxembourg Fund Partners.

Alter Domus, a Luxembourg fund platform and administrator that has financial backing from private equity giant Permira, bought Luxembourg Fund Partners in December 2017, after Columna’s collapse, when LFP I SICAV’s assets under management totaled nearly 400 million euros ($450 million).

In a statement released earlier this week, the new directors said they had launched a claim to recover investment losses, management and performance fees from Alter Domus Management Company. LFP I SICAV’s assets under management now total around 80 million euros.

Columna made double-digit gains in 2014, 2015 and 2016 investing in a range of commodity products, according to information it sent its investors. But it then closed abruptly in December 2016 without returning any of its assets.

An Alter Domus spokesman said the firm was only aware of “significant issues” with Columna between 2013 and 2016 after buying Luxembourg Fund Partners.

The spokesman declined to comment on the legal claim.

In a previous email, he said Alter Domus was looking into the issues with Columna and had “engaged various external firms to assist with our investigation, the findings of which has led to the commencement of legal actions”. He declined to comment further on the legal actions, saying they were ongoing.

Permira declined to comment.

After being asked by Columna investors to help, asset recovery specialist David Mapley was one of three directors appointed to a new board of LFP I SICAV late last year and authorized by the Luxembourg regulator in February 2019 to take over management of the fund stable from Alter Domus.

Luxembourg’s financial regulator declined to comment on individual firms or court cases.

Reporting by Carolyn Cohn, Simon Jessop and Maiya Keidan; editing by David Evans

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Norway’s wealth fund extends ownership of New York real estate

BlueMountain names slate for PG&E board

OSLO (Reuters) – Norway’s sovereign wealth fund will pay about $98 million dollars to extend the term of its ownership in a portfolio of New York properties and to acquire a few new, the fund said on Wednesday.

“The partnership between Norges Bank Investment Management (NBIM), Trinity Church Wall Street and Hines has extended the remaining 72-year ownership interest in the Hudson Square portfolio in New York City to a 99-year term,” it said in a statement.

NBIM holds a 48 percent stake in a portfolio of 12 assets in the Hudson Square submarket.

As part of the transaction, NBIM has also agreed to acquire a 48 percent interest in two to-be-constructed assets adjacent to two of the existing assets in the portfolio, currently solely owned by Trinity Church Wall Street, the fund added.

Reporting by Nerijus Adomaitis

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Ackman’s fund zooms ahead as he casts himself as corporate helpmate

Ackman's fund zooms ahead as he casts himself as corporate helpmate

BOSTON (Reuters) – For months, activist investor William Ackman promised to rebuild his record. Now he has some numbers to prove it.

FILE PHOTO: William ‘Bill’ Ackman, CEO and Portfolio Manager of Pershing Square Capital Management, speaks during the Sohn Investment Conference in New York City, U.S., May 8, 2017. REUTERS/Brendan McDermid

Since Jan. 1, Pershing Square Holdings has gained 31.9 percent, making it the best start to a year in the firm’s 15-year history, Ackman wrote in a letter released on Monday.

More importantly, Ackman laid out how his hedge fund is essentially transforming itself into a holding company that owns stakes in public companies and offers a helping hand to struggling management teams to resurrect once-strong returns.

“We attribute our improved performance to initiatives that we have implemented over the last 18 months,” he wrote.

With his own transformation on firmer ground, Ackman said he can again help others. “Pershing Square, as a large influential investor with a track record for successful turnarounds, can provide management with the required runway and necessary long-term backing to succeed.”

For years Ackman earned billions for himself and clients while growing Pershing Square Capital Management into a roughly $20 billion firm. But in 2015 a soured bet on drug company Valeant paved the way for three years of losses, when investors ran for the exits, shrinking assets to $8 billion.

Now Ackman’s publicly traded fund, Pershing Square Holdings, makes up roughly three-quarters of the firm’s $8 billion in assets and the capital is stable because investors have to sell to another investor before exiting.

Permanent capital will help improve his own returns over time and let him become a helpmate to struggling companies, Ackman wrote.

To get here, Ackman went back to his roots and last year laid off staff, told his investor relations executives to stop raising new capital and re-dedicated himself to researching investment ideas instead of jetting around the world to visit with clients.

Ackman and his colleagues now own more than 20 percent of Pershing Square Holdings’ outstanding shares, he wrote.

His business, he explained to anyone who does not know about investments in companies like Chipotle and Canadian Pacific , is buying companies at a discount and helping them flourish again.

Over the last months, Ackman, once a fixture at conferences and on television, adopted a more low-key style, which he is translating to portfolio companies as well.

He said he has a lot of influence but prefers to use it “sparingly.” “Occasionally, we will ask a question, share an idea, or raise an issue. Most of the time, our CEOs rarely hear from us,” Ackman wrote, saying they call him. “We view our job as oversight, not day-to-day management.”

Reporting by Svea Herbst-Bayliss; editing by Grant McCooland Leslie Adler

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Ackman’s fund zooms ahead as he casts himself as corporate helpmate

Ackman's fund zooms ahead as he casts himself as corporate helpmate

BOSTON (Reuters) – For months, activist investor William Ackman promised to rebuild his record. Now he has some numbers to prove it.

FILE PHOTO: William ‘Bill’ Ackman, CEO and Portfolio Manager of Pershing Square Capital Management, speaks during the Sohn Investment Conference in New York City, U.S., May 8, 2017. REUTERS/Brendan McDermid

Since Jan. 1, Pershing Square Holdings has gained 31.9 percent, making it the best start to a year in the firm’s 15-year history, Ackman wrote in a letter released on Monday.

More importantly, Ackman laid out how his hedge fund is essentially transforming itself into a holding company that owns stakes in public companies and offers a helping hand to struggling management teams to resurrect once-strong returns.

“We attribute our improved performance to initiatives that we have implemented over the last 18 months,” he wrote.

With his own transformation on firmer ground, Ackman said he can again help others. “Pershing Square, as a large influential investor with a track record for successful turnarounds, can provide management with the required runway and necessary long-term backing to succeed.”

For years Ackman earned billions for himself and clients while growing Pershing Square Capital Management into a roughly $20 billion firm. But in 2015 a soured bet on drug company Valeant paved the way for three years of losses, when investors ran for the exits, shrinking assets to $8 billion.

Now Ackman’s publicly traded fund, Pershing Square Holdings, makes up roughly three-quarters of the firm’s $8 billion in assets and the capital is stable because investors have to sell to another investor before exiting.

Permanent capital will help improve his own returns over time and let him become a helpmate to struggling companies, Ackman wrote.

To get here, Ackman went back to his roots and last year laid off staff, told his investor relations executives to stop raising new capital and re-dedicated himself to researching investment ideas instead of jetting around the world to visit with clients.

Ackman and his colleagues now own more than 20 percent of Pershing Square Holdings’ outstanding shares, he wrote.

His business, he explained to anyone who does not know about investments in companies like Chipotle and Canadian Pacific , is buying companies at a discount and helping them flourish again.

Over the last months, Ackman, once a fixture at conferences and on television, adopted a more low-key style, which he is translating to portfolio companies as well.

He said he has a lot of influence but prefers to use it “sparingly.” “Occasionally, we will ask a question, share an idea, or raise an issue. Most of the time, our CEOs rarely hear from us,” Ackman wrote, saying they call him. “We view our job as oversight, not day-to-day management.”

Reporting by Svea Herbst-Bayliss; editing by Grant McCooland Leslie Adler

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Ubben’s socially conscious ValueAct Spring Fund bets on workplace wonk

Ubben's socially conscious ValueAct Spring Fund bets on workplace wonk

NEW YORK (Reuters) – Jeffrey Ubben’s ValueAct Spring Fund, which invests in companies aiming to address environmental and social problems, is making a bet on an academic-turned-hedge-fund-manager who picks stocks based on how effective companies are as employers.

Jeffrey Ubben, Founder & CEO at ValueAct Capital, poses for a portrait before speaking on the Reuters Newsmaker event’ “The Future of Shareholder Activism” panel in Manhattan, New York, U.S., February 22, 2017. REUTERS/Andrew Kelly

The Spring Fund is buying a stake in Irrational Capital, a hedge fund launched three years ago by Duke University behavioral economist Dan Ariely and his business partner David van Adelsberg. Terms of the deal were not disclosed.

It is an unusual move for a hedge fund to back a smaller rival. But ValueAct, the $15 billion fund that last year launched the $350 million Spring Fund, is familiar with such an arrangement. It sold a stake in itself to Affiliated Managers Group more than a decade ago.

So far Spring Fund has mainly bought stakes in publicly listed companies, including power utility Hawaii Electric Industries Inc and gene-editing company Horizon Discovery Group Plc.

“Dan (Ariely’s) work makes the case for connecting positive workforce culture to performance,” Ubben said in an interview. He met the economist seven years ago through a connection at Duke University, where Ubben earned his undergraduate degree.

Ariely and Van Adelsberg have come up with a system to measure employee engagement, pride in their work and sense of purpose across the corporate world. Their data is funneled into a computer that churns out rankings of companies that Irrational Capital then invests in.

Irrational Capital has so far gathered information on over 1,000 companies through “any type of data we can get our hands on,” Ariely said, adding this includes 350 companies with market capitalizations of more then $1 billion. Ariely declined to name the companies, and Ubben said he doesn’t need to know Ariely’s picks.

“We don’t intervene in what the data show by saying something like this company scores highly but we don’t like the CEO. We are true to the data,” Ariely said in an interview.

Ariely, a 51-year old professor, researcher and author, views himself as an expert in understanding human behavior. He spent time in the hospital as a teenager recovering from burns received when a flare exploded during a celebration and said the opportunity to observe nurses at work built his skill.

Meanwhile, Ubben, 57, is fast becoming one of Wall Street’s biggest critics of corporate America’s short-termism. He is now trying to convince investors that positive workplace culture can drive above-average returns.

OPERATIONAL CHANGES

For nearly two decades, Ubben has staked a claim to bringing a long-term approach to activist investing. His playbook does not usually call for a fast return of capital to shareholders or a quick flip of a company to a seller.

Instead, ValueAct prefers to push for operational changes at companies such as Microsoft Corp and Citigroup Inc from behind the scenes. Two years ago, Ubben handed the chief investment officer role at ValueAct to Mason Morfit, but he remains the firm’s CEO and runs the Spring Fund.

Over ValueAct’s lifetime, the main fund has returned an average of nearly 15 percent a year, an investor said. Ubben declined to say how the new fund has done, citing regulations.

Pushing back against corporate greed has galvanized public opinion and politicians alike, and Ubben wants to convince mainstream investors that committing resources to employees’ well-being will not short-change shareholders.

“These hedge fund managers write letters and dictate what should be done by management and then they get their buddies to buy the stock and help hijack the company,” Ubben said of some of his competitors, declining to name them.

Ubben said he was particularly irked when Aramark Inc, the food services and facilities company he recently invested in, was punished by analysts for doing good. Management returned the roughly $100 million windfall the company received through the tax system overhaul to employees in the form of higher wages and by boosting the match to their retirement savings, Ubben said. But Goldman Sachs Group Inc downgraded its rating to neutral from buy, citing growing labor pressures in the sector.

Aramark did not immediately respond to a request for comment.

Data from Gallup Inc, known for its public opinion polls, also showed that organizations that are best in engaging their employees deliver earnings per share growth that is more than four times that of their competitors.

“This is the last mile and this is the hardest thing,” Ubben said of Irrational Capital. “We want to spread the word and introduce the concept and grow it so that a lot of people will invest in it.”

Reporting by Svea Herbst-Bayliss; editing by Greg Roumeliotis and Cynthia Osterman

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