Morning Market, Hedge Fund and Private Equity News

Apr 7 2017 | 9:00am ET

April 7, 2017

The Dow Jones industrial average projected a 42-point decline after President Donald Trump ordered the United States military to attack an airfield in Syria late Thursday night.

The U.S. fired at least 59 missiles at an airfield believed to be the launching point of a deadly chemical weapons attack by the Syrian government earlier this week. 

The story has overshadowed President Trump’s meeting with Chinese President Xi Jinping and this morning’s release of the March jobs report. The U.S. Labor Department reported a huge miss on American job creation last month. The American economy added just 98,000 jobs, well short of the 180,000 expected by economists.

Here's what else you need to know on Apr. 7, 2017. 

Today’s Institutional Watch List

Another Liquidity Crisis on Tap?

Has “Too Big to Fail” just become “Too Bigger to Fail?”

In an interview with CNBC Friday morning, Minneapolis Fed Bank President announced that 12 U.S. banks with assets north of $250 billion will require "about twice as much" capital in the event of another financial crisis.

Activist Targets GAM

The Financial Times reports that activist investor RBR Capital is pushing for a “radical overhaul” of Swiss-based fund manager GAM. As Switzerland’s largest listed fund, the firm has been a target since it announced that its first half 2017 profits would decline by up to 50 percent.

RBR is seeking to rearrange the deck chairs on the board of directors, slash a few hundred jobs and topple GAM CEO Alexander Friedman.

No Turning Back on Coal

While President Donald Trump aims to deregulate the energy economy and “bring back” coal jobs across the Rust Belt states, there could be a significant roadblock for the carbon-intense fuel: Large investors like Norway’s sovereign wealth fund.

Reuters reports the fund is one of several large international investment funds that have discouraged more than a dozen U.S. utility companies from bolstering its reliance on coal-fired power.

A Change at the Top at Arconic?

Elliott Management remains locked in an activist battle with Arconic Inc. (ARNC).

The fund is pushing the company to engage in a turnaround strategy and to oust its CEO Klaus Kleinfeld. Elliott would prefer that ARNC hires former Spirit AeroSystems (SPR) CEO, Larry Lawson, to run the organization. Lawson is currently serving as a consultant to Elliott during the battle.

Will Activists Pounce on Twitter?

America’s favorite sound vacuum, Twitter Inc. (TWTR), has long been the source of speculation over activist interventions.

Such chatter is picking up again after company co-founder Ev Williams announced he would sell 30 percent of his shares for what he described as “personal” reasons. Twitter stock has fallen by more than 15 percent since the beginning of the year. Re/Code explains that Twitter’s single-class voting structure makes it vulnerable to outside influence.

Is This a Bright Idea?

Under the pressure of activist investor Trian Fund, General Electric (GE) is considering the sale of its iconic light bulb division, igniting opportunities for financial publications around the world to make light bulb puns for the next three days.

The Associated Press reports that Thomas Edison’s light bulb division has a “dim future” – while the Wall Street Journal says that the company that pioneered the lighbulb is now prepared to “turn off the switch." Trian Fund has been pressing the company to improve its financial performance. A deal could be worth of up $500 million. 

Friday Morning Reading List: 

Reuters: Julian Robertson Pulls Plug On Tiger Accelerator Fund, Exits Tiger Ratan

Preqin: APAC Investors More Upbeat About Hedge Funds Than Regional Counterparts

Forbes: Hedge Fund Tiger Global Is Making A Major Bet On Billionaire Leon Black

The Street: Scandal-Plagued Wells Fargo's Board Is Spread Too Thin, Adviser Warns 

DealBook: NRG, a Power Company Leaning Green, Faces Activist Challenge 

Check back for more hedge fund, private equity and market news throughout the day and be sure to read Friday's edition of The Daily Alpha. 

Check out yesterday's edition right here – Real Talk on David Axelrod, Elizabeth Warren, Gary Cohn and Leon Cooperman


In Depth

Q&A: Portfolio Advisors' Brian Murphy On The Advantages of A Private Markets Platform

Jan 2 2018 | 11:05am ET

Most private markets firms reference their platforms as a source of competitive...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Steinbrugge: The Top Hedge Fund Industry Trends for 2018

Jan 2 2018 | 12:22pm ET

Each year, Don Steinbrugge’s Agecroft Partners compiles the insights gained...

 

FINalternatives Trending

From the current issue of