Michael Platt’s BlueCrest Capital has resolved its lawsuit with Meredith Whitney’s Kenbelle Capital. The London hedge fund firm agreed to drop its lawsuit, which had called on Kenbelle to return BlueCrest’s $50 million stake in Whitney’s American Revival Fund, according to Bloomberg, citing court documents. Terms of the settlement were not disclosed. Platt, who had staked the one-time influential Wall Street analyst’s hedge fund launch in 2013, asked for his money back in October after Kenbelle fell to about $46 million in value. In an affidavit posted online, Whitney laid out an aggressive attempt by Platt and his lawyer to redeem, at one point belittling the size of her other investors compared to himself. “He has a lot more money than you,” she quotes mutual friend Martin Newson, who introduced Platt to her. “He further said that, ‘He could crush me,’” she stated in the affidavit. When she asked what exactly that meant, Whitney quoted Newson: “He will make sure you will never be able to raise or manage money again.”
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Richard “Mick” McGuire III’s Marcato Capital Management has finally resolved its dispute with Sotheby’s. The San Francisco activist said in a regulatory filing Monday that it will drop legal proceeding against the auctioneer, which has agreed to review on a confidential basis redacted portions of a previous settlement with another activist. However, if Sotheby’s continues to redact some pages, Marcato says it may refile its previous challenge or file a new one. We recently reported that Marcato went to Delaware Chancery Court seeking documents under seal from earlier legal proceedings involving the company and Daniel Loeb’s Third Point. Marcato noted that while resolution of that dispute was announced May 5, “completely unredacted versions of certain court filings remain unavailable to the public.” Marcato asserts the information in the documents under seal “does not appear to be the type of proprietary information that would warrant protection from release by the court,” adding, “in any event, sufficient time has passed since the action concluded to warrant unsealing.” Marcato also points to an order dated May 7 whereby the Delaware court granted the hedge fund’s previous request to unseal Third Point’s opening brief, filed April 29, 2014. Marcato notes the brief was subsequently released to the court file in unredacted form.
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Kingdon Capital Management is apparently growing more bullish on biotech. On Monday alone, it disclosed in two separate regulatory filings that it significantly boosted its stake in two companies within this sector. The New York hedge fund firm headed by Mark Kingdon said it roughly quadrupled its stake in Heron Therapeutics to more than 2.8 million shares, or 9.56 percent of the company’s total shares outstanding. Separately, the New York hedge fund firm boosted its stake in Xoma to more than 10.8 million shares, or 9.19 percent of the total from 7.6 million shares at the end of the first quarter. Both positions are passive. Three weeks ago, Kingdon also upped its stake in Fate Therapeutics, a clinical-stage biopharmaceutical company, by 60 percent. At the end of the first quarter, Kingdon had a 15 percent net exposure to the health care sector in general, which along with cyclicals was the largest bet in its portfolio, according to the firm’s first-quarter letter. Kingdon Global Long/Short Equity (Composite) rose 4.69 percent in May and is now up 12.19 percent year-to-date. Kingdon Credit rose 1.38 percent in May and is now up 6.22 percent for the year. Kingdon had $2.1 billion in its long-short strategy as of April 1.
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On Monday Credit Suisse raised its price target on Mondelez International from $42 to $48, noting its recent meetings with management “increased our conviction that the company has more room for operating-margin expansion.” The bank also raised its earnings estimates for 2016 and 2017 and its operating-margin estimate for 2018 and cited as positive the fact that Nelson Peltz is on the board of directors. Peltz is a founder of Trian Fund Management, which is Mondelez’s fourth-largest shareholder. At the end of the first quarter, Mondelez was one of 10 Trian holdings and one of its three largest investments.
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UBS Monday cut its price target on hedge fund favorite Micron Technology from $38 to $35, citing soft demand for its semiconductors ahead of the launch of Windows 10. It adds in a note to clients that it expects dynamic random access memory fundamentals to “remain soft until channel inventory fill starts in earnest” during the fourth-quarter holiday build season. As a result, UBS expects Micron’s stock to trade in a range over the next few months until earnings improve. At the end of the first quarter, three of the top nine shareholders were New York-based Greenlight Capital, which has for awhile counted the stock among its largest positions, Greenwich, Connecticut-based Viking Global Investors and Boston-based Baupost Group.
