24/7 Wall St. » OZM

The 10 Largest Hedge Funds in America

Administrator — Fri, 16 Mar 2012 10:01:14 +0000

By now, most investors know that the large hedge funds are run by billionaires rather than millionaires. What many investors might not know is that some hedge funds are reaching the size of large mutual fund families. They have become enormous. To give an idea of their size, the bottom two hedge funds among the top 10 in the U.S. alone have nearly $20 billion in assets under management each.

Read The 10 Largest Hedge Funds in America

What is even more amazing than the funds’ individual size is the size of the hedge fund world. In the U.S., funds that had $1 billion or more in assets cumulatively had assets under management of more than $1.3 trillion. Well over $1 trillion of those assets tracked were distributed in New York, Connecticut and Massachusetts.

The industry may be huge, but it is not stable. That’s because so many funds take such outsized risk to grow more rapidly than their competitors. Thousands of funds closed in 2008 after the fall of Lehman Bros. In what was probably the worst quarter in the industry’s history, Hedge Fund Research reported that 700 U.S. funds closed in the third quarter of that year. The funds not only lost money on investment, but also could not repay loans taken from banks that gave them leverage to help increase their asset bases.

The surge in the stock market and improvement in the economy lifted the hedge fund industry back toward record levels last year. According to HFR, the number of new funds rose to 1,113 last year from 935 in 2010, the most since 2007 when 1,197 were counted. Obviously, the success of the business is based to a large extent on the health of the economy, although some of the funds on this list have done well enough to defy that lesson.

A recent report from Absolute Return lists U.S. hedge funds according to their assets under management as of January 2012. A look at the top 10 hedge funds reveals several rather well-known names, but also shines a light on several completely unknown ones.

24/7 Wall St. examined the top 10 hedge funds and outlined their respective units. We also provided the funds’ investment strategies and included some of their top holdings if available.

Filed under: Activist Investor, Annual Report, Banking, Compensation, Corporate Governance, Economy, Editor's Picks, Financial Stocks, Mergers and Buy Outs, Mutual Funds, Private Equity, Special Report, Tax Tagged: AAPL, BAC, BLK, BP, CMG, DLPH, EP, GLD, GR, INTC, LLY, MCD, MMI, OZM

Carlyle Remains On Track for 2012 IPO (CG, BX, KKR, ACAS, OZM, FIG, PSP)

Administrator — Wed, 11 Jan 2012 16:44:44 +0000

The Carlyle Group L.P. is still planning to be one of the top private equity initial public offerings of 2012. We even named it as one of the Top 17 IPOs to Watch in 2012. That charge is not due to its size… It is due to the notion that every private equity shop out there may start to value the company based upon what happens in the after-market in the weeks and months after the IPO.

Some of the private equity firms which will be watching this offering closely are The Blackstone Group (NYSE: BX) worth $7.4 billion, Kohlberg Kravis Roberts & Co. (NYSE: KKR) worth $3.1 billion, American Capital, Ltd. (NASDAQ: ACAS) worth almost $2.5 billion, Och-Ziff Capital Management Group LLC (NYSE: OZM) worth about $925 million, and Fortress Investment Group LLC (NYSE: FIG) worth about $665 million. There is also the PowerShares Global Listed Private Equity (NYSE: PSP) ETF that Carlyle will ultimately become a part of when it comes public.

Carlyle is going to list on NASDAQ rather than on the NYSE and it is going to list under the ticker “CG” for its units. No financial terms have been set for the deal. The private equity giant has selected J.P. Morgan, Citigroup, and Credit Suisse as the listed book-runners for this IPO.

It is hard to admit that it was hard to ignore that the founders made a combined $413 million in 2011 ahead of this IPO. The full amended filing is here.

One reason that private equity deals matter to the public right now is because of Mitt Romneys’s roots back to Bain and the current misconceptions about what private equity firms actually do. While layoffs happen at most private equity buyout targets, many of those businesses were failing to generate profits and many may have eventually folded on their own. Who are the largest clients of private equity firms? Usually company and governmental pension funds.

JON C. OGG

Filed under: Banking, Brokerage Firms, Financial Stocks, IPOs, Mergers and Buy Outs, Private Equity Tagged: ACAS, BX, CG, FIG, KKR, OZM, PSP

Symetra, a Buffett Holding, Plans IPO… Again (SYA, BRK-A, WTM, BEN, OZM)

247wallst — Tue, 06 Oct 2009 15:56:07 +0000

After the close on Monday came a little-known IPO filing from a life insurance operation called Symetra Financial Corp. It turns out that the Bellevue, Washington-based insurer has no terms for the sale but listed a sale of up to $575 million in the initial public offering filing. This is not the first attempt to come public, but it turns out that Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A) and White Mountains Insurance Group, Ltd. (NYSE: WTM) effectively control the company.

This one filed for an IPO of up to $750 million back in 2007, but the insurer pulled the plug on the IPO in 2008. You can guess the reason listed… ‘unfavorable market conditions.’

Symetra plans to trade under the stock ticker “SYA” on the New York Stock Exchange. It has an impressive lineup of joint book running managers: BofA Merrill Lynch, JPMorgan, Goldman Sachs and Barclays Capital.

We noted that Berkshire Hathaway is a shareholder, and that stake is listed as 26.3%. But other shareholders include White Mountains Insurance Group, Ltd. (NYSE: WTM) also listed with a 26.3% stake. Franklin Mutual Advisers, LLC, a unit of Franklin Resources, Inc. (NYSE: BEN) is listed as a 11.7% stakeholder. Even Och-Ziff Capital Management Group LLC (NYSE: OZM) is listed as a 6.6% stakeholder via its OZ Master Fund, Ltd. Other stakeholders include Vestar Capital Partners, Highfields Capital Management, and Caxton Associates.

Based on how Symetra’s stakeholders are listed and per the filing, this is effectively controlled by Symetra is controlled by Berkshire’s General Re and White Mountains. This time the company and holders will sell shares, although again terms are not disclosed.

Symetra’s revenues fell by almost 9% in 2008 from 2007 to $1.45 billion, with about 60% coming from group and individual insurance lines. Most of the drop was attributed to investment losses.

You can join our open email distribution list which goes out several times per week to hear about all of our coverage on Warren Buffett, IPO’s, secondary offerings, mergers, top analyst calls, and key trader alerts each morning.

JON C. OGG
OCTOBER 6, 2009

Posted in Buffett, Editor's Picks, Financial Stocks, IPOs, Private Equity Tagged: BEN, BRK-A, OZM, SYA, WTM

52-Week High Club

247wallst — Wed, 30 Sep 2009 20:26:36 +0000

Jabil Circuit (NYSE: JBL) hit a yearly high of $13.47 after beating both guidance and analyst estimates for its quarterly earnings.

Kohl’s Corporation (NYSE: KSS) hit a yearly high of $57.19 after the company announced the opening of 37 new stores.

Och-Ziff Capital Management (NYSE: OZM) hit a yearly high of $12.24 as the company continues to recover from a significant decline in assest under management.

Petrobras Energia Participaciones SA (NYSE: PZE) rallied over 180% to a yearly high of $17.97 after it announced that the company was completing reorganization moves.

TransDigm Group Incorporated (NYSE: TDG) hit a yearly high of $49.94 after announcing that it would offer $425 million of senior subordinated notes in order to fund a special dividend.

Virgin Media Inc. (NASDAQ: VMED) hit a yearly high of 13.97, capping off a monthly gain of 17%.

Yahoo! (NASDAQ: YHOO) hit a yearly high of $17.80, capping off a monthly gain of nearly 20%.

Garrett W. McIntyre

Posted in Aerospace, Cable Companies, Defense, Dividend, Internet, Media, Oil & Gas, Technology Companies, Telecom Tagged: JBL, KSS, OZM, PZE, TDG, VMED, YHOO

Host Of Companies Win In Strong DigitalGlobe IPO (DGI, MS, OZM, ORB, GEOY)

247wallst — Thu, 14 May 2009 12:23:07 +0000

DigitalGlobe is set to open for trading this morning in another highly anticipated initial public offering. The satellite imagery company will trade on the NYSE with the ticker “DGI.” The IPO was priced at $19.00 for some 14.7 million shares. Morgan Stanley (NYSE: MS), Och-Ziff Capital Management (NYSE: OZM), Orbital Sciences Corporation (NYSE: ORB) are among the public companies which are all listed as shareholders of DigitalGlobe.

The lead underwriters are listed as Morgan Stanley and J.P. Morgan Chase & Co., and co-managers are listed as Citigroup, Merrill Lynch, and Jefferies.

The pricing is technically above the $16 to $18 per share price range we had previously indicated. The company has two high-resolution satellites for detailed mapping and plans to launch a third satellite later this year. If you want a direct comparison, the company competes head to head with GeoEye, Inc. (NASDAQ: GEOY).

Revenues were $106.8 million in 2006, $151.7 million in 2007, and $275.2 million in 2008. Be advised that about 70% of the revenues were from the US government. Two other customers are Google, Microsoft, and Garmin.

Early indications are said to be north of $20.00, although that may rise or fall into the opening of this IPO.

JON C. OGG

Posted in IPOs, Satellite Tagged: DGI, GEOY, MS, ORB, OZM

Top 10 Analyst Upgrades & Downgrades (APC, ATML, CBY, CEO, EXR, N, OXY, OZM, PSA, WFC)

247wallst — Tue, 05 May 2009 11:27:01 +0000

These are ten of the top pre-market analyst calls we have seen early this Tuesday morning with more than two hours until the market opens:
Anadarko Petroleum (APC) Cut to Equal Weight at Barclays.
Atmel (ATML) Raised to Outperform at FBR.
Cadbury Schweppes (CBY) Raised to Neutral at JPMorgan.
CNOOC Ltd (CEO) Cut to Neutral at JPMorgan.
Extra Space Storage (EXR) Cut to Underweight at KeyBanc.
Netsuite (N) Cut to Sell at Piper Jaffray.
Occidental Petroleum (OXY) Raised to Outperform at Barclays.
Och-Ziff Capital (OZM) Raised to Outperform at KBW.
Public Storage (PSA) Cut to Underweight at KeyBanc.
Wells Fargo (WFC) Started as Outperform at Oppenheimer.

JON C. OGG

Posted in Analyst Calls Tagged: APC, ATML, CBY, CEO, EXR, N, OXY, OZM, PSA, WFC

Public Companies To Benefit From DigitalGlobe IPO (DGI, MS, OZM, ORB)

247wallst — Thu, 30 Apr 2009 17:05:25 +0000

DigitalGlobe, Inc. may be the next high tech initial public offering, and it looks like several public companies will stand to benefit from it. This is a high-resolution satellite image operation that will trade under the “DGI” ticker on the New York Stock Exchange. We have a tentative launch indication of mid-May. Morgan Stanley (NYSE: MS), Och-Ziff Capital Management (NYSE: OZM), Orbital Sciences Corporation (NYSE: ORB) are the public companies which are all listed as shareholders of DigitalGlobe, although these are just a few among the lot of other listed owners and insiders.

A price range of $16.00 to $18.00 has been established, and this would yield approximately $250 million in gross proceeds before fees and commissions. The lead underwriters are listed as Morgan Stanley and J.P. Morgan Chase & Co., and co-managers are listed as Citigroup, Merrill Lynch, and Jefferies.

The listed shares are noted 43,464,751 shares of common stock outstanding on April 15, 2009 and 44,871,007 shares of common stock outstanding after the completion of this offering.

Approximately 14.7 million shares are in the offering. The company will be offering 1,366,256 shares of its common stock and the selling stockholders are offering 13,333,744 shares.

DigitalGlobe’s satellite images are used by the defense sector, energy sector, mining sector, and more. The company’s revenue was roughly $275 million in 2008.

JON C. OGG

Posted in IPOs, Satellite Tagged: DGI, MS, ORB, OZM

Top Pre-Market Analyst Downgrades (AINV, BHI, BAC, WFR, MBT, OZM, SPWRA, STP, VIP, WMT)

247wallst — Wed, 21 Jan 2009 07:40:00 +0000

These are some of the top pre-market analyst downgrades or cautious calls we are seeing from Wall Street this Wednesday morning:

Apollo Investment (AINV) Cut to Neutral from Overweight at JPMorgan.
Baker Hughes (BHI) Cut to Underweight at from Overweight at Morgan Stanley.
Bank of America (BAC) Cut to Neutral at Baird.
MEMC Electronics (WFR) Cut to Hold at Citigroup.
Mobile TeleSystems (MBT) Cut to Underperform at credit Suisse.
Och-Ziff Capital Management Group LLC (OZM) Cut to Market Perform at KBW.
Sunpower (SPWRA) Started as Neutral at Merriman Curhan Ford.
Suntech Power (STP) Started as Sell at Merriman Curhan Ford.
Vimpel Com (VIP) Cut to Neutral from Outperform at Credit Suisse.
Wal-Mart (WMT) Cut to Neutral from Outperform at Credit Suisse.

Jon C. Ogg
January 21, 2009

Posted in Analyst Calls Tagged: AINV, BAC, BHI, MBT, OZM, SPWRA, STP, VIP, WFR, WMT

Downgrading Hedgies, Private Equity & Financials (BX, FIG, GLG, IVZ, JNS, OZM, STD, TROW)

247wallst — Wed, 14 Jan 2009 07:50:33 +0000

There is an interesting trend where Barclays has essentially cut its rankings on hedge fund and private equity operators. Here are the calls, plus a call elsewhere on a bank:

Blackstone (NYSE: BX) Cut to Underweight at Barclays.
Fortress Investment (NYSE: FIG) Cut to Equal Weight at Barclays.
GLG Partners (NYSE: GLG) Cut to Equal Weight at Barclays.
INVESCO (NYSE: IVZ) Started as Equal Weight at Barclays.
Janus Capital (NYSE: JNS) Started as Underweight at Barclays.
Och-Ziff Capital (NYSE: OZM) Cut to Equal Weight at Barclays.
Banco Santander, S.A. (NYSE: STD) Cut to Sell from Neutral at UBS.
T. Rowe Price (NASDAQ: TROW) Started as Equal Weight at Barclays.

Jon C. Ogg
January 14, 2009

Posted in Analyst Calls, Banking, Financial Stocks, Private Equity Tagged: BX, FIG, GLG, IVZ, JNS, OZM, STD, TROW

Top 10 Early Analyst Upgrades & Downgrades (FUL, OZM, REP, TOL, DOV, EMR, GA, GSK, MEDX, RDS-A)

247wallst — Fri, 14 Nov 2008 07:26:18 +0000

These are ten of the top pre-market early bird upgrades and downgrades we are seeing from analysts this Friday morning:

H.B. Fuller (NYSE: FUL) Raised to Overweight at JPMorgan.
Och-Ziff Capital (NYSE: OZM) Started as Buy at Jefferies.
Repsol YPF (NYSE: REP) Raised to Buy from Hold at ING; Raised to Hold from Sell at Soc-Gen.
Toll Brothers (NYSE: TOL) Started as Outperform at KBW.
Dover (NYSE: DOV) Cut to Underweight at JPMorgan.
Emerson Electric (NYSE: EMR) Cut to Underweight at JPMorgan.
Giant Interactive (NYSE: GA) Cut to Perform at Oppenheimer.
GlaxoSmithkline (NYSE: GSK) Cut to Neutral from Buy at UBS.
Medarex (NASDAQ: MEDX) Started as Sell at Merriman Curhan Ford.
Royal Dutch Shell (NYSE: RDS-A) Cut to Hold from Buy at ING.

Jon C. Ogg
November 14, 2008

Posted in Analyst Calls Tagged: DOV, EMR, FUL, GA, GSK, MEDX, OZM, RDS-A, REP, TOL