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☆ ISS backs all four ValueAct director candidates in Seven & I boardroom fight
▼ + stars: | 2023-05-10 | by ( Svea Herbst-Bayliss | ) www.reuters.com time to read: +3 min

"A vote AGAINST company nominees Isaka, Goto, Yonemura, (Shinji) Wada and (Fuminao) Hachiuma is warranted." ISS said ValueAct is calling for a deliberate succession process for the CEO. On Tuesday, ISS extended support for ValueAct's campaign by endorsing all of its candidates and spelling out where the company has faltered. ValueAct and other investors had urged the company to undertake a strategic review and consider spinning off its 7-Eleven chain or selling the entire company. ISS said that ValueAct's nominees bring board experience, capital allocation and executive experience, and Levinson would add a shareholder perspective.

☆ ISS backs all 4 ValueAct director candidates in Seven & I boardroom fight
▼ + stars: | 2023-05-09 | by ( Svea Herbst-Bayliss | ) www.reuters.com time to read: +2 min

"A vote AGAINST company nominees Isaka, Goto, Yonemura, (Shinji) Wada and (Fuminao) Hachiuma is warranted." ISS said ValueAct is calling for a deliberate succession process for the CEO. On Tuesday, ISS extended support for ValueAct's campaign by endorsing all of its candidates and spelling out where the company has faltered. ISS said that ValueAct's nominees bring board experience, capital allocation and executive experience, and Levinson would add a shareholder perspective. ValueAct has experience on boards at Japanese companies, having won seats at Olympus and JSR Corp.

NEW YORK, May 4 (Reuters) - The practice of short selling is coming under increased scrutiny as shares of regional banks remain under pressure, with some calls for more regulatory oversight of the practice. Short sellers, who borrow shares they expect to fall and hope to repay the loan for less later to pocket the difference, have profited from the banking crisis. During the financial crisis, short selling was temporarily banned in the U.S., although a New York Federal Reserve review later showed the curb did not achieve the intended effect. The SEC declined to comment on Thursday when asked if it should impose a short selling ban. While some market participants criticized the practice, others, like non-profit group Better Markets, said short sellers warned markets about the challenges regional banks were facing.

☆ Pressure grows for US regulatory intervention as bank rout deepens
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +4 min

"Investors are clearly continuing to focus on remaining players that are deemed the weakest," wrote UBS banking analyst Erika Najarian on Thursday. The Federal Deposit Insurance Corp. did not respond to a request for comment. Critics say increasing deposit insurance could encourage risk-taking, and note regulators have fewer tools to rescue banks following the 2008 financial crisis. The latest crisis began in March when runs on Silicon Valley Bank and Signature Bank led to their abrupt closures, leading depositors to move their cash to bigger banks. To stem the contagion, regulators took emergency steps to reimburse all customers at the two banks, while the Fed offered lenders additional liquidity.

[1/2] David Hunt President and CEO, PGIM, speaks at the 2023 Milken Institute Global Conference in Beverly Hills, California, U.S., May 1, 2023. As Wall Street money managers, banking executives and pension fund managers gathered at the Milken Institute Global Conference, the main topic over cocktails on Sunday night and in conference rooms the following morning was JPMorgan Chase & Co's (JPM.N) purchase of First Republic Bank. Policymakers, executives and investors at the conference said constrained lending as a result of banking sector regulation could choke off credit to the economy. Nevertheless, betting against bank stocks has been a profitable endeavor this year, which has seen the high-profile failures of Silicon Valley Bank and Signature Bank, in addition to First Republic and a state-engineered rescue of Credit Suisse by the Swiss government. The KBW Regional Banking Index, which fell 2.7% on Monday, is down almost 23.6% year-to-date, while First Republic’s shares are off 97% since January.

BEVERLY HILLS, May 2 (Reuters) - Wells Fargo & Co (WFC.N) CEO Charlie Scharf said on Tuesday the banking industry is "extremely strong" but added he expects more volatility as market participants assess the health of financial institutions. "Talking about regional banks as one - it just makes absolutely no sense," Scharf said at the Milken Institute Global Conference. "Unfortunately, there will be a lot of volatility and turmoil," he said, adding that "the majority of the banks that we look at are still extremely strong." He did not expect more bank failures comparable to the recent collapses of Silicon Valley Bank, Signature Bank and First Republic Bank. Lazard advised First Republic Bank (FRC.N) before it was seized by regulators and sold to JPMorgan on Monday.

Instead, fixed income, which was unpopular when rates were low, is back in favor and seeing strong capital flows into products like bond funds, said fund managers at the Milken Institute Global Conference this week. Attendees also discussed whether federal regulators should raise FDIC deposit insurance after First Republic Bank was seized and sold to JPMorgan, and how markets will react to even higher interest rates and potentially more market volatility. Others warned that companies will soon have to refinance their debt at higher rates, making them less attractive. Instead, thanks to higher interest rates, fixed income is once again playing a bigger role in portfolios. "The Fed has helped us put the income back in fixed income," said Anne Walsh, Chief Investment Officer for Guggenheim Partners Investment Management.

☆ How asset managers see the investment outlook at Milken
▼ + stars: | 2023-05-01 | by ( ) www.reuters.com time to read: +2 min

[1/4] Edwin Conway Global Head, BlackRock Alternatives, speaks at the 2023 Milken Institute Global Conference in Beverly Hills, California, U.S., May 1, 2023. REUTERS/Mike BlakeBEVERLY HILLS, May 1 (Reuters) - Big money managers gathered at the Milken Institute Global Conference, in Beverly Hills, California, on Monday to discuss the environment for investments amid higher interest rates, sticky inflation, banking turmoil and geopolitical tension. KAREN KARNIOL-TAMBOUR, CO-CIO AT BRIDGEWATER ASSOCIATES"The problem is that when you get paradigm shifts that really change the nature of the market environment, it takes a long time for that to get fully digested by investors." So fixed income long-short hedge fund managers feel that there's going to be very interesting distressed opportunities in eight, ten, twelve months." Reporting by Carolina Mandl and Svea Herbst-Bayliss, in Beverly Hills; Editing by Josie KaoOur Standards: The Thomson Reuters Trust Principles.

☆ QUOTE BOX How asset managers see the investment outlook at Milken
▼ + stars: | 2023-05-01 | by ( ) www.reuters.com time to read: +1 min

[1/4] Edwin Conway Global Head, BlackRock Alternatives, speaks at the 2023 Milken Institute Global Conference in Beverly Hills, California, U.S., May 1, 2023. REUTERS/Mike BlakeBEVERLY HILLS, May 1 (Reuters) - Big money managers gathered at the Milken Institute Global Conference, in Beverly Hills, California, on Monday to discuss the environment for investments amid higher interest rates, sticky inflation, banking turmoil and geopolitical tension. See below some of their comments:EDWIN CONWAY, GLOBAL HEAD OF BLACKROCK ALTERNATIVES:"This is a difficult environment to navigate. KAREN KARNIOL-TAMBOUR, CO-CEO AT BRIDGEWATER ASSOCIATES"The problem is that when you get paradigm shifts that really change the nature of the market environment, it takes a long time for that to get fully digested by investors." Reporting by Carolina Mandl and Svea Herbst-Bayliss, in Beverly Hills; Editing by Josie KaoOur Standards: The Thomson Reuters Trust Principles.

☆ Citi's Fraser warns U.S. debt ceiling debate has serious consequences
▼ + stars: | 2023-05-01 | by ( ) www.reuters.com time to read: +1 min

BEVERLY HILLS, May 1 (Reuters) - Citigroup chief executive officer Jane Fraser said on Monday that debate about the debt ceiling in the United States had serious consequences even as the investing world breathes a sigh of relief that an ailing bank was rescued by a bigger competitor the same day. The debt ceiling turmoil is "more worrying" than previous events, Fraser said at the Milken Institute Global Conference. Facing uncertainty, Fraser stopped short of saying there is a world financial crisis but she said the stress will be there and will be targeted in certain sectors. She also said that she expected a lot of people to make a lot of money. Reporting by Svea Herbst-Bayliss and Carolina Mandl; Editing by Hugh LawsonOur Standards: The Thomson Reuters Trust Principles.

☆ ISS urges Pitney Bowes shareholders to back 4 dissident directors in proxy fight
▼ + stars: | 2023-04-26 | by ( Svea Herbst-Bayliss | ) www.reuters.com time to read: +2 min

"Substantial board change is still necessary," ISS wrote in its report to investors which was seen by Reuters. Still, it is not enough, ISS wrote, adding Pitney Bowes has a "history of failing to deliver on important self-established expectations." "We strongly disagree with the recommendation of ISS that shareholders vote for such an extreme and destabilizing level of change at Pitney Bowes," company spokesman Bill Hughes said. Pitney Bowes is valued at $624 million, down from its peak of $2 billion when CEO Marc Lautenbach joined in 2012. "Shareholders have endured a decade of underperformance and disappointment, there are unanswered questions and serious concerns about the path forward," ISS wrote.

☆ ValueAct urges ouster of Seven & i President Isaka - letter
▼ + stars: | 2023-04-21 | by ( Svea Herbst-Bayliss | ) www.reuters.com time to read: +2 min

The San Francisco-based investment firm, which owns a 4.4% stake in the convenience store operator, is ratcheting up the pressure by saying publicly that Isaka has acted in bad faith since becoming president in 2016. "It is time to find a new President for Seven & i," ValueAct wrote to Seven & i shareholders in a letter dated April 20. The letter also criticizes the board for having failed to conduct a succession review for Isaka. ValueAct said Seven & i recorded meetings with its team without its consent, violating privacy laws around the world. Seven & i did not immediately respond to a request for comment and ValueAct declined to comment beyond the contents of the letter.

NEW YORK, April 20 (Reuters) - The co-head of the private equity firm that owns Dominion Voting Systems said the company's $787.5 million settlement with Fox Corp (FOXA.O) held Fox accountable for spreading lies even if it did not apologize or admit wrongdoing. The settlement came with no apology or admission of wrongdoing on behalf of Fox, just an acknowledgement of the court's rulings finding some claims about Dominion to be false. Dominion and Staple Street achieved their goals by exposing the truth and Fox News' "offensive" actions and getting the media company to pay for them, Yaghoobzadeh said. In a statement following Tuesday's settlement, Fox said it was committed to the highest journalistic standards. Dominion funded the litigation through its own resources, without Staple Street or a third party providing financial backing, Yaghoobzadeh said.

Even before Tuesday's settlement, Staple Street's investment in Dominion had paid off handsomely. Yaghoobzadeh told reporters on Tuesday that Staple Street backed Dominion in its mission to shoot down lies against it. Staple Street investor Mark Hauser, managing partner of Hauser Private Equity, also welcomed the settlement news. "We are very pleased with the outcome and think that Staple Street has handled the situation very well on behalf of their investors. We’ve had a relationship with Staple Street since 2014 and think highly of their management team," he said.

☆ Cutera fires CEO, stock tumbles and large investor speaks out
▼ + stars: | 2023-04-12 | by ( Svea Herbst-Bayliss | ) www.reuters.com time to read: +2 min

CEO David Mowry and activist investor J. Daniel Plants, who has served on the board for eight years, were terminated for alleged violations of their employment contracts, Cutera said. RTW Investments, Cutera's second biggest investor with a 9.3% stake, called on the company to reinstate Mowry and to hold a special meeting. Market reaction to Mowry's removal "demonstrates the need for the Special Meeting and the lack of confidence in the board," RTW said in a statement. Top Cutera executives, including the chief financial officer, on Tuesday supported Mowry and Plants, arguing the men work well together and had earned their trust. The California-based company, which sells devices including laser treatments for tattoo removal and acne, appointed independent board member Sheila Hopkins as interim CEO.

Firms that concentrate on stocks, however, rode a late month market rally to small gains, according to investors and industry data. Many hedge funds are still compiling March and first quarter numbers, but preliminary reports from research firm Hedge Fund Research showed the average hedge fund was off 1% last month and ended the quarter flat. The macro hedge fund is down nearly 9.5% year-to-date through March, the source added. The Balyasny Atlas Enhanced fund gained 0.8% in March and is up 1% for the year. A Goldman Sachs report, based on returns posted by the bank's prime brokerage's clients, showed fundamental long/short funds gained 1.04% in March.

"We think the company should spin off 7-Eleven and that this could help close the valuation discount," Artisan Partners Associate Portfolio Manager Ben Herrick, told Reuters. Investors, including Artisan Partners, ValueAct and a domestic institutional investor contacted by Reuters that is not permitted to discuss its views publicly, are blaming Seven & i's stagnant share price on management's attachment to a conglomerate structure. SPIN-OFF PROPOSALThree months ago, ValueAct proposed a tax free spin-off of 7-Eleven, via a listing on the Tokyo Stock Exchange in roughly one year. One investor said 7-Eleven, the company's crown jewel, will stop shining brightly unless it is spun off. A source said Seven & i president Ryuichi Isaka is one of the board members ValueAct wants to replace.

WASHINGTON, April 3 (Reuters) - The U.S. Federal Trade Commission (FTC) on Monday ordered Illumina (ILMN.O) to divest cancer diagnostic test maker Grail, finding that its ownership would stifle competition in the U.S. market for cancer tests. Illumina said it would appeal the decision, and will seek expedited consideration from an appeals court. The company said the FTC order to unwind the deal would be automatically put on hold. Meanwhile, Illumina completed the takeover of Grail in August 2021, despite the lack of regulatory approval from Europe or the United States. He has called for Illumina, now valued at $36 billion, to unwind its deal for Grail, which he called a risky acquisition that cost shareholders $50 billion.

☆ ValueAct questions Seven & i strategy, pushes 7-Eleven spin-off
▼ + stars: | 2023-04-02 | by ( Svea Herbst-Bayliss | ) www.reuters.com time to read: +2 min

A representative for the company was not immediately available for comment and ValueAct declined further comment beyond the letter. Last month Seven & i signaled a "continuation of its status quo conglomerate structure," which confused and disappointed markets, the letter said. Now ValueAct wants answers to nine key questions when the company reports earnings this week. Does the board understand how frustrating the conglomerate structure is to shareholders and has it evaluated the conglomerate discount, the investment firm asked. The spin-off could be completed through a listing on the Tokyo Stock Exchange in roughly a year, ValueAct said earlier.

☆ Corporate agitator Ackman tells US to raise FDIC insurance limit to shore up confidence
▼ + stars: | 2023-03-29 | by ( Svea Herbst-Bayliss | ) www.reuters.com time to read: +2 min

NEW YORK, March 29 (Reuters) - Billionaire investor William Ackman who spent years telling corporations how to perform better is now taking on the U.S. government by calling for higher insurance limits to safeguard the banking system at the height of a banking crisis. Ackman, who runs hedge fund Pershing Square Capital Management, sent a letter to his investors saying the FDIC should raise its $250,000 per account limit days after U.S. regulators took over Silicon Valley Bank and Signature Bank, triggering a crisis in U.S. regional banks. In his annual letter to shareholders he amplified a message he has been blasting for days on Twitter. "Banking is a confidence sensitive business," and regulators' conflicting public statements have "reduced investor, business, and consumer confidence in our banking system" he wrote. Ackman's investment firm's Pershing Square Holdings portfolio has returned 25.1% per year over the last five years, handily beating its broader stock market index which gained 9.4% a year during the same time.

☆ Envestnet names three new directors, ends board fight with Impactive Capital
▼ + stars: | 2023-03-28 | by ( Svea Herbst-Bayliss | ) www.reuters.com time to read: +2 min

Longtime banking executive Barbara Turner, veteran board member Wendy Lane and Lauren Taylor Wolfe, the co-founder of Impactive Capital, joined the board in the last days. Envestnet, which provides technology and automation software for financial advisors and banks, also said it will suggest that all of its directors stand for election every year. "These appointments were informed by Envestnet's ongoing dialogue with shareholders as we continue to execute on our strategic plan to deliver enhanced value to shareholders," James Fox, Envestnet board chairman, said in a statement. Impactive, founded by veteran investors Taylor Wolfe and Christian Asmar, owns a 7.5% stake in Envestnet and in January nominated four director candidates to the board. Impactive blamed poor profit margins and capital allocation for Envestnet's underperformance and said its management and board directors were overpaid.

☆ Exclusive: ValueAct seeks to oust four directors of Seven & i
▼ + stars: | 2023-03-24 | by ( Svea Herbst-Bayliss | ) www.reuters.com time to read: +2 min

March 24 (Reuters) - ValueAct Capital informed Seven & i Holdings (3382.T) on Friday it would lobby to remove four directors from the Japanese's convenience store operator's 14-member board, citing "a failed corporate strategy." ValueAct, which owns a 4.4% stake of Seven & i, had called on the company's management in January to spin-off of its 7-Eleven convenience store chain. The letter did not state how ValueAct will seek to oust the four directors, whom it did not publicly identify. ValueAct, which is led by Mason Morfit, won a board seat earlier this year at cloud computing company Salesforce (CRM.N). Six new directors joined Seven & i's board last year.

"There is a brick wall in front of M&A activity," said Anu Aiyengar, global head of M&A at JPMorgan Chase & Co (JPM.N). "We are in for choppiness," said Scott Barshay, chair of the corporate department at law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP. And it's a giant struggle because there's a lot of dry powder for the equity part of private equity deals. Dealmakers, however, said they expect the impact from the banking crisis on broader M&A activity to be contained, as most of the worst affected regional banks are not major advisers or lenders on deals. The technology sector remains the best hunting ground for corporate acquirers or private equity financiers, deal advisors said.

One hedge fund manager described trades in the financial sector as being "all over the map", with nobody agreeing on anything. Some breathed a sigh of relief that a competitor stepped in with a rescue offer for Credit Suisse. Others worried that the $3.2 billion UBS will pay is far less than the $9.5 billion Credit Suisse was valued at on Friday, and one investor said the market may not consider this to be a positive. loadingLater, short seller Jim Chanos tweeted his shock that $17 billion of Credit Suisse bonds would be wiped out, asking "What are the Swiss doing here…?!" There was also little agreement on how investors would be positioning themselves in smaller U.S. banks, including First Republic.

☆ Citadel discloses 5% stake in Western Alliance amid sell-off
▼ + stars: | 2023-03-14 | by ( ) www.reuters.com time to read: +1 min

March 14 (Reuters) - Hedge fund Citadel on Tuesday said it bought a 5.3% stake in Western Alliance Bancorporation (WAL.N), sending a strong signal of confidence as the company was swept up in growing fears of a broader financial crisis after two other banks were seized. Western Alliance's share price, which had tumbled on Monday, shot higher on Tuesday, rising as much as 43% shortly after the opening of trading. Last year's returns made Citadel the most successful hedge fund ever. Western Alliance was one of a number of banks caught in a crippling sell-off since last week when regulators shut down startup-focused bank SVB Financial Group (SIVB.O) that triggered worries of a contagion and rippled across financial markets. Reporting by Svea Herbst-Bayliss in Boston, Mehnaz Yasmin in Bengaluru; editing by Uttaresh VenkateshwaranOur Standards: The Thomson Reuters Trust Principles.

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