WSJ Blackstone's Adventure Capital Plan

Blackstone's Adventure Capital Plan

Something is moving in the shadows.
Blackstone Group plans to back several teams of traders who will make big, bold bets, largely on stocks, The Wall Street Journal reported Sunday. This seems to confirm the law of conservation of speculation: Speculative appetite is neither created nor destroyed by regulation—but it can be moved.
Much of the focus on the Volcker rule, which bans most speculative trading by banks, has been on how it has forced them to rein in trading desks. But it also has long been expected to push a lot of trading into the less-regulated areas, such as asset managers.
The Volcker rule improves the economics of running teams of swashbuckling speculators for the firms it doesn't touch. In addition to limits on proprietary trading, banks are specifically prohibited from doing what Blackstone is reportedly planning: owning hedge funds that make speculative bets.
Absent competition from banks, Blackstone can probably negotiate better terms with both its traders and outside investors.
The reported structure of the Blackstone plan—funding separate teams with around $500 million—aligns with the latest thinking of many hedge-fund investors. They favor funds with assets of less than $1 billion, concerned that larger funds tend to underperform as managers struggle to find investment opportunities at that scale.
Another advantage of having a diverse group of funds concerns survivorship bias: It increases the likelihood of having at least one big winner. Laggards can be quietly run down, and the victorious touted as a sign of Blackstone's investment prowess.
Besides more stringent regulation of banks, Blackstone's funds would say a lot about another feature of postcrisis markets: a lack of yield and volatility. In this environment, institutional investors may be easily persuaded to take on risk alongside Blackstone. Just as they used to say that no one ever lost their job for buying an IBM computer, it is likely no institutional fund manager fears being accused of recklessness for investing in a Blackstone fund.

>>> BBRY : Investors are starting to think Blackberry has a future

It’s been a wild ride, but BlackBerry shares are actually having a pretty decent 2014. The stock is up around 30% this year, compared to a 6% rise for the S&P 500.

BlackBerry now appears to have broken out of its share price death spiral, but questions about its future remain. For one thing, the company’s 2014 share-price resurgence is off a really low base. Between 2010 and 2013, the stock plummeted by some 87 percent as its once-pioneering smartphones, with their tiny keyboards, hemorrhaged market share to touchscreen devices, most notably Apple’s iPhone. Goldman Sachs estimated that the company now accounts for less than a 1% share of smartphone sales, compared to a peak of around 20% in 2009.

Chief executive John Chen has set about transforming BlackBerry from a device maker into a mobile solutions company. The company’s most recent quarterly earnings were stronger than expected, but analysts at Credit Suisse are still worried that the company is burning through too much cash. Once the benefits of real estate sales and tax refunds are taken into account, BlackBerry still spent $255 million during the quarter.

The jury’s out on the Chen transition at a corporate level. But BlackBerry basically admits it has a serious perception problem among consumers. Last week it resorted to the unusual public relations tactic of setting up a fact-check portal, which it says it will use to counter the ““smoke and mirrors” marketing tactics” being spread by its competitors.

FT : Henderson to acquire Geneva Capital Management

Henderson Global Investors announced plans to buy Geneva Capital Management on Monday in a $200m deal that will strengthen the Anglo-Australian group’s business in the US.
The acquisition is a significant milestone for Henderson as it gives it control of Geneva’s $6.3bn of assets in mid and small-cap US equities and builds on the hiring of a team of US fixed income specialists last year.

Andrew Formica, chief executive, said: “We have doubled our business in the US in just two years. This may be a small acquisition but it is the next big step for us as we seek to diversify our business.” Henderson, dual-listed in Australia and the UK, is paying $130m up front with $45m linked to revenue retention and $25m linked to growth-related earnings.
The deal was largely praised by analysts, who said the price was reasonable and fitted the group’s strategy to diversify into the US market.
Citi said: “The deal should allow Henderson to marry its own strong US retail distribution and developing global platform with Geneva’s strong institutional presence.”
Henderson’s traditional strength has been in European equities, which amount to about 20 per cent of the group’s more than £70bn in assets under management (AUM). Its other core areas of investment are global equities, global fixed income and multi-assets and alternatives.
With the purchase of Geneva, Henderson’s US assets under management will rise to $18.3bn, which is just under 15 per cent of the group’s AUM.
Mr Formica wants to grow US AUM to 20 per cent of the company’s total. In May, Henderson for the first time saw its US mutual fund range reach $10bn, with net inflows of $1.4bn so far this year.
The deal comes after Henderson reported record profits and inflows in February. It announced underlying pre-tax profits of £190.1m in 2013, a rise of 24 per cent on the previous year. The group also increased its AUM to £75.2bn to the end of last December, an increase of 13 per cent compared with the previous year. Mr Formica wants to double AUM to £130bn over the next five years. After recent property divestments, AUM is £72.5bn.
It also follows the acquisitions of New Star in 2009 and Gartmore in 2011 and should help Henderson strengthen its position as the “go to” house for equity income. This is a product offering Mr Formica has been developing over the past two years as baby boomers, people aged between 45 and 65, look for income in retirement. Henderson’s shares rose 1.82 per cent to 240.80 by 3.20pm. The transaction is expected to close on October 1.

>>> Molson open to buying craft breweries; believes targets in Canada and the US

Molson open to buying craft breweries; believes targets in Canada and the US are 'massively overvalued' 

Molson Coors Brewing (NYSE:TAP) believes that craft breweries in Canada and the US are "massively overvalued" to the point where they're generally too costly to acquire, according to a newswire report.

Bloomberg on Friday cited Molson CEO Peter Swinburn as saying the day prior that the company, while open to the possibility of adding more craft breweries to its stable, finds that valuations of craft breweries in North America are excessively lofty. He explained in the article that Canadian craft breweries are difficult to acquire on account of the tax advantages on their side, and US craft breweries are overvalued as a result of the growing popularity of the niche. While Molson is open to acquiring new brands, Swinburn said in the article that the company is not desperate to the point of "running around" North America or Europe to compel craft breweries owners to sell their companies to Molson.

Swinburn said in the article that Molson can accomplish its goals by acquiring, building or borrowing. He added that the company, which sells its Blue Moon brand in Japan and Australia, intends to operate in the craft breweries niche in those markets.

Meanwhile, the article, which noted that the major players in the beer space could experience further consolidation, added that Molson has been viewed by some investors as a potential takeover target down the road.

(MergerMarket) Violin Memory in spotlight amid flash storage consolidation, sour

Violin Memory in spotlight amid flash storage consolidation, sources say

Violin Memory (NASDAQ: FIO), a maker of flash array systems, has been placed in the spotlight as a potential target following the sale of flash storage company Fusion-io (NYSE: FIO) to SanDisk (NASDAQ: SNDK) earlier this month, said industry sources.

The Salt Lake City-based company, which has a USD 404m market cap, has put a new management team in place in the last four months in an effort to stem losses and position the company for growth.

Mark Peters, a storage analyst at Enterprise Strategy Group, said Violin shares similarities with Fusion-io: both were once regarded as the darlings in enterprise storage, but their weak financial performance following their IPOs led to steep stock slides and management changes. “The spotlight is now on Violin to see if they can turn themselves around,” said Peters.

A second analyst agreed, and named Micron Technology (NASDAQ: MU), whose CEO Mark Durcan on 23 June said it is looking at making acquisitions of storage technologies, as one possible buyer.

Besides Micron, other makers of raw NAND flash memory chips, such as SanDisk, Toshiba, SK Hynix, Intel (NASDAQ: INTC) and Samsung, have been looking to offer more complete flash storage systems that include controllers, software and greater end-user functionality, noted Peters and the analyst.

Fusion-io achieved greater functionality through its purchase of NEXGEN, while Violin now has that through its joint venture with Microsoft (NASDAQ: MSFT), dubbed Windows Flash Array, noted Peters.

With Windows Flash Array, Violin’s product can be used as a storage server in data centers and provide enterprise-class data services, such as replicating data to remote locations or taking data snapshots that can be used for more efficient storage backups.

Eric Herzog, who in March joined as chief marketing officer and senior vice president of business development, said Violin’s new management team intends to grow Violin as a standalone, independent company. Among the management changes, Kevin DeNuccio became Violin’s CEO and Tom Mitchell became SVP global field operations in February. In March Ebrahim Abbasi became SVP operations and Said Ouissal became SVP product management and strategy.

Violin earlier this year sold its PCIe business to SK Hynix for USD 23m in a bid to focus on all flash storage arrays. “We were doing too many things. We’re a small company with a tight budget and you have to choose your battles,” said Herzog.

The divestiture will also help Violin achieve profitability, said Herzog. Violin has shrunk its losses and the company expects to start growing again in 2H14, he said. Violin posted a net loss of USD 30.1m in its first quarter ended 30 April, a little more than the USD 28.5m net loss in the prior year, but down sequentially from the USD 56.5m net loss in the prior quarter. First quarter revenue was USD 18.1m, 27% less than the USD 24.8m from the same quarter a year earlier.

Flash-based PCIe cards are designed to attach to a server, while all-flash arrays can be shared by multiple servers, providing better economics and workloads, argued Herzog. Also known as shared storage, the market for that is projected to be a USD 30bn industry, per year, over the next couple of years, said Herzog.

Violin’s major competitors in the shared storage space include IBM (NYSE: IBM), NetApp (NASDAQ: NTAP), EMC (NYSE: EMC), Hewlett-Packard (NYSE: HPQ) and Dell. Violin also competes against offerings from ventured-backed flash players Pure Storage, SolidFire and Kaminario.

“Our stated goal is to continue to grow as an independent company, expand market share, product breadth and solutions,” said Herzog.

Shares in Violin closed Friday at USD 4.48, down from a high of USD 7.98 reached shortly after its IPO last September. Violin shares reached a low of USD 2.50 last December.

(BFW) Swiss Life CEO Says 2015 Margin Goals ‘Ambitious,’ AWP Reports

Swiss Life CEO Says 2015 Margin Goals ‘Ambitious,’ AWP Reports
2014-06-30 14:08:44.77 GMT


By Jan-Henrik Förster
     June 30 (Bloomberg) -- Bruno Pfister says in interview with
Swiss news agency AWP that exceeding margin goals on a
sustainable basis is ambitious.
  * Says Co. can be pleased if new business margin will be well
    above 1.5%
  * Says shareholders can expect higher payout ratios in mid-
    term once regulatory requirements are met
  * Says Swiss Life hasn’t been approached by US authorities on
    tax issues
  * Link to AWP article (German)
  * NOTE: Pfister to leave Swiss Life as CEO as of July 1
  * NOTE: Swiss Life shares fell as much as 1.8% in Zurich today


For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>

To contact the reporter on this story:
Jan-Henrik Förster in Zurich at +41-44-224-4116 or
jforster20@bloomberg.net
To contact the editor responsible for this story:
Mariajose Vera at +49-89-244478-803 or
mvera1@bloomberg.net

>>> University of California system to block compensation of employees for use o


University of California system to block compensation of employees for use of Airbnb, Lyft or Uber due to liability issues - press 

UCOPs Office of General Counsel has determined that third party lodging and transportation services, commonly referred to as peer-to-peer or sharing businesses, should not be used because of concerns that these services are not fully regulated and do not protect users to the same extent as a commercially regulated business. As the market matures and these businesses evolve, the University may reconsider whether reimbursement of travel costs provided by peer-to-peer or sharing businesses will be allowed. Therefore, until further notice, please do not use services such as Uber, Lyft, Air B&B or any other similar business while traveling on or engaging in UC business.