WSJ : Former SAC Executive Raises About $1 Billion For New Hedge-Fund Firm

Former SAC Executive Raises About $1 Billion For New Hedge-Fund Firm
Solomon Kumin’s Folger Hill Hires Former U.S. Attorney, Cluster Of Traders

Former SAC Capital Advisors LP chief operating officer Solomon “Sol” Kumin is close to lift off with the launch of a roughly $1 billion hedge fund.

Mr. Kumin’s Folger Hill Asset Management LLC has raised about $1 billion as it looks to start trading in March, a person familiar with the firm said. His new employees include Lisa Baroni, a former U.S. Attorney who helped prosecute the Bernard Madoff Ponzi scheme. Ms. Baroni will head compliance for the new firm.

As The Wall Street Journal first reported last summer, Mr. Kumin’s new stock-focused firm secured a $400 million investment from Leucadia National Corp. in exchange for a near-50% ownership stake in the new firm. Folger Hill is named after a lookout point on the Massachusetts island of Nantucket, where Mr. Kumin’s family spends vacations.

Having now more than doubled the Leucadia sum with other commitments, Mr. Kumin has opened offices in New York and Boston. He also plans to have between nine and 11 separate portfolio managers trading about $300 million apiece, including the use of borrowed money, or leverage, by the end of the first quarter, the person familiar said.

The structure is similar to his former employer SAC, which doled out parcels of cash to separate trading teams reporting up to founder Steven Cohen. SAC agreed to plead guilty to insider trading in 2013, and refashioned itself as a family office managing only the wealth of Mr. Cohen, his family and select employees.

Mr. Kumin, whose focus at SAC included building investment teams, left the firm early last year.

Mr. Kumin has thus far hired just one former SAC colleague: Brian Younger, an ex-SAC portfolio manager who focuses on technology, media and telecommunications stocks. Other new Folger Hill portfolio managers hail from multibillion-dollar hedge-fund firms like PAR Capital Management Inc., Pennant Capital Management LLC and PointState Capital LP.

>>> Danaher prepared to spend more than USD 8bn on acquisitions - CEO

Danaher prepared to spend more than USD 8bn on acquisitions - CEO
Danaher (NYSE:DHR), an instrument and testing maker, plans to continue an aggressive acquisition program over the next year and has "north of USD 8bn in capacity" to do such deals, CEO Thomas Joyce said.

It was possible that the company could spend the USD 8bn on a large deal, Joyce said on the sidelines of the JPMorgan Healthcare conference in San Francisco, California on Tuesday. He declined to further comment on possible targets but mentioned that life sciences and diagnostics are key areas of interest.

"We are very biased towards continuing to put our balance sheet to work," Joyce told investors at the conference. "We don't view 2015 as a year of digestion. It's not a year we're taking a pause."

Joyce's comments come amid speculation that the aggressive acquirer could have its sights on Agilent Technologies (NYSE:A), a maker of life sciences instruments that has a market value of just over USD 13bn. One industry banker told this news service that a Danaher acquisition of Agilent "makes sense for a variety of reasons."

When asked about the possibility on Tuesday, Agilent President and Chief Operating Officer Michael McMullen declined to comment. "I don't comment on rumor or speculation. I don't write those things," he said.

McMullen said the key goal for Agilent in 2015 is to streamline operations and integrate recent acquisitions which include Dako, which it acquired for USD 2.2bn in 2012. In September, it spun off Keysight Technologies (NYSE:KEYS) into a separate company, allowing Agilent to focus on life sciences and diagnostics.

The industry banker said Agilent's Dako and Danaher's Leica division have "strategic similarities" which make them a good fit.

Danaher’s Joyce said in the investor presentation that the company announced or closed about USD 4bn worth of acquisitions in 2014, including Nobel Biocare, which it agreed to acquire for USD 2.17bn in September in a bid to expand in the dental implants market.

>>> FEDERAL RESERVE BEIGE BOOK: ECONOMY CONTINUED TO EXPAND, MOST REGIONS SHOWED

FEDERAL RESERVE BEIGE BOOK: ECONOMY CONTINUED TO EXPAND, MOST REGIONS SHOWED MODEST TO MODERATE GROWTH 

Reports from the twelve Federal Reserve Districts suggest that national economic activity continued to expand during the reporting period of mid-November through late December, with most Districts reporting a "modest" or "moderate" pace of growth. In contrast, the Kansas City District reported only slight growth in December. However, most of their contacts, along with those of several other Districts, expect somewhat faster growth over the coming months. The Dallas District indicated that growth slowed slightly during the reporting period and that several contacts expressed concern about the effect of lower oil prices on the District economy. Consumer spending increased in most Districts, with generally modest year-over-year gains in retail sales. 

- Auto sales showed moderate to strong growth. Travel and tourism picked up during the reporting period. The pace of growth of demand for nonfinancial services varied widely across Districts and across sectors, but appeared to be moderate on balance. Manufacturing activity expanded in most Districts. Single-family residential real estate sales and construction were largely flat on balance across the Districts, while commercial real estate activity expanded. Demand for business and consumer credit grew. 

- Credit quality improved a bit further overall. Agricultural conditions were mixed. Overall demand for energy-related products and services weakened somewhat, while the output of energy-related products increased.Payrolls in a variety of sectors expanded moderately during the reporting period. Significant wage pressures were largely limited to workers with specialized technical skills. Prices increased slightly, on balance, in most Districts.

WSJ : Forex Probe Finds New Signs of Potential Wrongdoing

Forex Probe Finds New Signs of Potential Wrongdoing
J.P. Morgan and Citi Sack Forex Staff Partly as a Result of U.S. Justice Department Investigation

LONDON—Banks and traders that figured the worst was over in the foreign-exchange scandal are facing an unpleasant surprise.

Investigations into attempted manipulation of the vast currencies markets have uncovered new signs of potential wrongdoing, sparking a fresh round of firings by Wall Street banks and snaring new financial institutions.

J.P. Morgan Chase & Co. and Citigroup Inc., which settled some U.S. and British investigations last year, both recently have fired or suspended foreign-exchange employees based in part on materials turned up by a continuing U.S. Justice Department investigation, according to people familiar with the matter. J.P. Morgan on Wednesday set aside an additional $990 million to pay for investigations and other legal expenses, while its chief executive complained about being “under assault” from regulators.

A major brokerage firm, Tullett Prebon PLC, has launched an internal review into its practices in the currencies markets, according to a person familiar with the matter.

The moves come as the Justice Department conducts sprawling antitrust and fraud investigations into potential improprieties in the foreign-exchange market. The investigations are examining a wider array of issues than the U.S. and British probes that six banks last autumn paid a total of $4.3 billion to settle, according to people familiar with the investigations. In those cases, the banks acknowledged that their employees had attempted to manipulate parts of the currencies market.

Among the aspects of the Justice Department’s criminal probe is whether bank employees tipped off hedge-fund clients to large foreign-exchange trades that the banks were planning and that were likely to move markets, these people say. The Justice Department’s fraud division also is looking into the practice of “spoofing,” in which traders or brokers submit fake trading data to move markets, or confuse clients or competitors.

At UBS AG , which has been cooperating with the Justice Department in the hopes of receiving leniency, government investigators have sought to interview an employee in the Swiss bank’s wealth-management business as part of their criminal probe, according to a person familiar with the matter. The UBS employee, based in a Florida wealth-management office, was involved in electronic communications that caught the attention of investigators, this person said.

Scrutiny of UBS’s large wealth-management business, which caters to ultrarich individuals, would represent a new focus in the investigation, which so far has mostly targeted potential wrongdoing by traders and salespeople in investment banks.

Multiple teams of Justice Department lawyers this month have been in London to interview past and present traders and salespeople from Royal Bank of Scotland and HSBC Holdings PLC, according to people familiar with the matter. Another round of interviews, with higher-ranking bank employees, is scheduled to occur in coming weeks, one person said.

Banks spent much of 2013 and 2014 trying to clean up their foreign-exchange desks. Over that period, global banks suspended or fired dozens of people who were involved in what bank lawyers concluded were improper emails or electronic-chat sessions.

But the investigations by the U.K.’s Financial Conduct Authority and the U.S. Commodity Futures Trading Commission, among others, focused on a fairly small group of traders who were members of specific electronic chat rooms that the agencies concluded were rife with misconduct.

The Justice Department’s investigation is taking longer but is focusing on a larger group of employees. As investigators share their findings with bank lawyers, more disciplinary action is getting under way.

J.P. Morgan last week suspended Gordon Andrew, a London-based currencies trader, after finding evidence that he disclosed trade information to employees of other banks, according to people familiar with the matter. One area of concern: Mr. Andrew’s work converting large quantities of euros into pounds at benchmark rates in connection with subsidies that the European Union pays each year to British farmers, one person said.

Mr. Andrew didn’t respond to requests for comment.

Citigroup in recent weeks has suspended or fired several foreign-exchange traders and salespeople, according to people familiar with the matter. Bank executives say more disciplinary action is expected in coming months as Citigroup cooperates with the Justice Department investigation, which is uncovering new information about potential wrongdoing.

A broker at Tullett Prebon, the firm that is conducting an internal review, was referred to in an electronic chat room known as “The Cartel” as a conduit for trades, according to people who have seen the chat transcripts. That chat room was the main focus of the British investigation and is also under scrutiny by the Justice Department. The broker, who was referred to in the chats by a colorful nickname, remains employed by Tullett.

Tullett’s involvement in the foreign-exchange saga harks back to the scandal surrounding manipulation of benchmark interest rates. British fraud prosecutors last year criminally charged a former Tullett broker with helping bank traders rig rates, and Tullett has said it is cooperating with government investigations.

At HSBC, one aspect of the Justice Department investigation is whether the bank’s salespeople leaked market-moving information to hedge fund Moore Capital Management LLC about a coming trade related to a major corporate acquisition, The Wall Street Journal reported in November.

In Washington, Justice Department investigators are in the process of conducting final interviews with past and present UBS employees, suggesting that a settlement is possible in the next month or two, according to people familiar with the matter.

Justice Department officials have told lawyers representing banks and traders that they intend to file criminal charges against individuals and perhaps some of the institutions this year, according to people familiar with the discussions.

>>> Holcim-Lafarge receive bids for global package from Blackstone and CVC led c

Holcim-Lafarge receive bids for global package from Blackstone and CVC led consortia

Only two private equity consortia submitted final bids on 12 January for the global package of assets being sold by Holcim [VTX:HOLN] and Lafarge [EPA:LG] to secure competition clearance for their merger, two sources close to the situation said.

Blackstone, Cinven and Canada Pension Plan (CPP) submitted a bid for the entire package, as did the consortium comprising CVC and sovereign wealth funds ADIA and GIC, the sources said.

A further six bids were submitted for separate parts of the business around the world, the first source said. But the sellers are leaning towards a single buyer, even if it means selling at a discount, both sources said.

The global package is seen fetching around EUR 6bn, the first and a third source said.

The winning bidder is expected to be chosen and its details submitted to the European Commission (EC) for review by the end of this month, the sources said. The second source added that it could take less time – around ten days – to choose the winning bidder.

The parties will consider a range of factors alongside the price when selecting a buyer, including the certainty of the buyer and its financing, according to people familiar with the process.

The EC approved the Holcim/Lafarge merger on 15 December, subject to commitments, following a Phase I investigation. The deal cannot close until the EC has approved the buyer of the assets.

The EC does not have a fixed deadline for a decision and took as long as two months in the buyer approval process following Telefonica Deutschland’s [FRA:O2D] acquisition of E-Plus. "Up to two months" for approving a buyer is not unusual, a fourth source close commented. A number of other regulators will also need to approve the buyer in a similar process, the source added.

The proposed buyer assessment does not entail any formal market testing, the fourth source said. But, in the buyer approval process for E-Plus/Telefonica, the EC approached competitors involved in remedy negotiations with requests for information.

The parties have agreed to sell all of Lafarge’s operations in Germany, Romania and the UK (with the exception of the Cauldon cement plant); all of Holcim’s businesses in Slovakia and the Czech Republic; many of Holcim’s assets in France and some of Holcim’s operations in Spain. Assets in Brazil, Canada and the Philippines are also being sold.

Brazilian regulator CADE has given conditional approval. The groups are still awaiting approval in the US and Canada, according to the fourth source.

In the meantime, financing banks are preparing packages for the global assets, the second source said. For the bids that went in for separate parts of the business, financing packages will be offered by the local banks where the assets are based, he added.

>>> Fed's Plosser (hawk, non-voter): Fed cannot control long-term bond yields, U

Fed's Plosser (hawk, non-voter): Fed cannot control long-term bond yields, US economy is nowhere close to deflation - Q&A - Low long-term rates are difficult to parse but may reflect concerns about situation in Europe, reach for yield
- Fed needs to look past transitory impacts from oil prices, should not over react to the oil situation
- Inflation may remain low for a while
- Wage growth is not something the Fed can control

(BFW) Shanghai Jin Jiang to Pay $1.13b-$1.43b for Groupe du Louvre


Shanghai Jin Jiang to Pay $1.13b-$1.43b for Groupe du Louvre
2015-01-14 13:57:41.455 GMT


By Bloomberg News
(Bloomberg) -- Co. to pay 960m euros-1.21b euros, depending
on factors including valuation report, further talks, according
to statement dated today.
* Co. to pay at least 30% of consideration from own funds
* Co. to use bank loans to finance balance of purchase
* NOTE: Jin Jiang said in Nov. that it signed pact with
Starwood to buy Louvre Group
Link: http://tinyurl.com/pd5l3w3

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