Posts by Julia La Roche

Bill Ackman's $12 billion hedge fund is moving into this sick 2-story glass penthouse

Pershing Square Capital Management, the $12 billion activist hedge fund led by Bill Ackman, has officially signed a 15-year lease for its new home in New York’s Hell’s Kitchen neighborhood, real estate developer The Georgetown Company announced on Wednesday.

Pershing Square and The Pershing Square Foundation, which are currently located at 888 7th Avenue, will relocate their headquarters in late 2017 to the historic car dealership building at 787 11th Avenue. The new offices will occupy a 67,000 square-foot, two-story glass penthouse on the 9th and 10th floors — a new addition to the building. The penthouse also features a private terrace and a tennis court.

Just over a year ago, The Georgetown Company partnered with members of the Ackman family to purchase the property. The Georgetown Company is known for developing the iconic IAC Building located on 19th Street in Manhattan’s West Side.

Adam Flatto, the CEO of The Georgetown Company, told Yahoo Finance one of the compelling reasons they decided to develop the property is the growth on the far West Side.

Check out the renderings (Note: The interiors are not Pershing Square’s office).

GE has paid Wall Street bankers $3.6 billion in fees in the last decade

On Monday, General Electric (GE) said it will merge its oil and gas business with oilfield services provider Baker Hughes in a dealthat will create a new company with $32 billion in revenue.

The deal is also a nice payday for Wall Street’s dealmakers.

On the advisory side, it’s estimated that GE could pay between $25 to $35 million to boutique investment bank Centerview and  Wall Street behemoth Morgan Stanley (MS), according to M&A consultant Freeman & Co. Baker Hughes (BHI) is expected to pay $30 to $40 million to Goldman Sachs (GS). 

GE has paid out more in investment banking fees than any other US corporation. In the last decade, the energy giant has shelled out $3.64 billion in investment banking fees for M&A, bonds and loans , according to Freeman.

— Julia La Roche is a finance reporter at Yahoo Finance.

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Wall St. CEO explains what will happen no matter who wins the election

Amid the “hands down” most contentious presidential election, Richard Handler, the CEO of investment bank Jefferies and its parent company Leucadia National (LUK), circulated a letter offering some personal perspective.

At the end of the day, the “American Way” is bigger than any one candidate.

“As painful as this process has been, supporters of all sides must and will come together to rally around the eventual winner. No matter how wrong every voter might feel about the other side, the American Way will win out and the states of America will once again become the United States of America. This is fundamental to the U.S. democracy and, while not perfect, there is no better system,” Handler wrote.

Voting is a personal and private decision. It’s OK to disagree with the other side, but everyone is entitled to his or her own opinion.

“The U.S. and we as individuals are far better off by encouraging the expression of a wide assortment of conflicting ideas and then voting based on them, versus suppressing independent thought, controlling the media or using force to intimidate those we disagree with.”

Below is the full letter:

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Hedge fund manager explains why oil will be capped at $50

Hedge fund manager Anna Nikolayevsky, the founder of $170 million Axel Capital, says that oil prices capped at $50 and Wall Street just hasn’t realized it.

The crux of the argument is that technological innovation has transformed this established industry, she said in a presentation at the Capitalize For Kids Conference in Toronto last week.

Nikolayevsky pointed out that virtually all of the sophisticated players in the industry missed the oil price crash in 2015.

“This got us thinking that maybe there’s some hidden inefficiency at play that the market might be missing out,” she said.

She noted that current Wall Street analyst projections show that the consensus is that oil prices have hit bottom and that they’ll steadily go back up. Some analysts have a target of $70 and a few see oil going back to $80 by 2019. Most of these banks are using depletion analysis and require break-evens to determine future price.

One research note she quoted from in her presentation said, “The world cannot operate like this. We need higher oil.”

“‘Hope’ and ‘need’ are not strategies,” Nikolayevsky said.

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20 years ago, Bill Ackman asked Warren Buffett and Charlie Munger about a risk the market faces today

Twenty years ago, a young investor named Bill Ackman made an astute observation about indexationto investing legend Charlie Munger.

“We’ve heard a lot of discussion about how institutions and individuals use index funds,” Ackman, then 30, said to Munger at The Buffett Essays Symposium, a conference that took place in October 1996. “But to the extent that more and more capital becomes indexed — and if you think about index fund managers as really being a computer, then in terms of the voting of shares for instance — the more stock that is held by people who don’t care about individual corporations, the more there is a significant societal detriment to have capital in the hands of people who are just seeking average performance.”

“You are plainly right,” Munger responded, “If you pushed indexation to the very logical extreme you would get preposterous results.”

“It’s called closet indexation: You keep the fee but you deliver the index.” Munger agreed.

Einhorn: Elon Musk is a promotional CEO who’s blinding his own investors

Closely followed hedge fund manager David Einhorn, the founder of Greenlight Capital, just made another swipe an Tesla (TSLA) CEO Elon Musk.

“Last quarter we ended our letter with a quote about Tesla. This quarter we begin with one from Dave Pell, editor of NextDraft: ‘It’s pretty amazing that we live in an age when a CEO of two public companies can give a talk about colonizing Mars and shareholders don’t see that as a warning signal ,'” Einhorn wrote in a letter dated October 28.

He continued: “It’s not so amazing when one considers that those same complacent shareholders have been willing to look past years of over-promising and under-delivering from a promotional CEO. Elon Musk’s ability to spin a yarn and keep a story going seems to mesmerize his investors, blinding them to the challenges the company is facing.”

Einhorn has not publicly stated a position on Tesla.

Jonas is an auto analyst for Morgan Stanley.

Tesla didn’t immediately respond to a request for comment.

ValueWalk first reported the contents of the letter.

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Hedge fund manager makes case for 'the one remaining large pocket of deep value'

Hedge fund manager Anthony Bozza, founder of the $3 billion Lakewood Capital, is bullish on the financials, noting the valuations in the sector are “unusually attractive.”

In a letter to investors, dated October 24, Bozza described it as “the one remaining large pocket of deep value in the market.”

“While we acknowledge there have been many well-publicized challenges that the financial sector has confronted in recent years (from increased regulation to remarkably low interest rates), these concerns have driven the S&P Bank Index to an unusually attractive level in our view, as represented by its lowest relative price / book value versus the S&P 500 Index in over a quarter century (as far back as measured),” Bozza wrote in the letter seen by Yahoo Finance.

Broadly speaking, earnings for financial services firms have been depressed due to the low interest rate environment. Bozza noted that higher rates would “likely drive significant outperformance” as it would result in higher earnings for those companies.

— Julia La Roche is a finance reporter at Yahoo Finance.

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Michael Bloomberg nails the 'greatest conundrum' America faces today

Former New York City Mayor Mike Bloomberg attempted to explain the sentiment of Donald Trump’s supporters, noting that many would be “flipping hamburgers” after they lose their jobs to technology.

“One thing that has to be said here is Donald Trump really does represent 40% to 45% of this country. They are petrified of their future. Their next job once they get laid off is going to be flipping hamburgers. They’re going to live until 85 and their Social Security is not enough to live on and they’re being forced out of their jobs in their fifties or whatever,” the multi-billionaire media and technology magnate said at Bloomberg’s “The Year Ahead” conference in New York on Tuesday.

He acknowledged that technology, not global trade, is destroying an enormous number of jobs. Indeed, this explains why manufacturing activity is up even as manufacturing jobs falter. This is a problem that affects the constituents of both political parties.

“You just can’t do that to this country,” Bloomberg, who has now publicly endorsed Hillary Clinton, said.

 

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Wall St. has raked in over $1.5 billion in fees from AT&T and Time Warner in the past decade

AT&T (T) on Saturday agreed to buy media and entertainment giant Time Warner (TWX) in a cash-and-stock deal valued at $85.4 billion, making it the biggest deal of the year if it’s approved by regulators.

It would also mean a nice payday for the investment bankers working on the deal. Perella Weinberg, JPMorgan (JPM) and Bank of America (BAC) are advising AT&T, according to Reuters. JPMorgan and Bank of America are also working on the bridge financing. Allen & Co., Citigroup (C) and Morgan Stanley (MS) are advising Time Warner.

— Julia La Roche is a finance reporter at Yahoo Finance.

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Get ready for a wave of M&A deals in 2017

Company executives are expecting an uptick in M&A activity in 2017, according to a survey from EY called the “Global Capital Confidence Barometer.”

More than 1,700 senior executives were surveyed, including 445 from large US companies.

So far in 2016, there’s been a drop in the number and size of domestic M&A deals. That also follows a record 2015.

EY’s survey found that approximately 75% of the US executives are planning an M&A transaction in the next 12 months.

“Deal intentions are very high, and I think there’s lot of reasons for it,” Bill Casey, EY Americas vice chair of transaction advisory services, told Yahoo Finance.

“I think there’s a continuing pressure on CEOs to grow the business, to increase shareholder value, and activism. And again, companies are looking for in a low growth environment, they’re looking for growth. And our Capital Confidence Barometer still shows that over half of a company’s growth strategy relies on inorganic growth.”

The sorts of deals executives are pursuing is starting to change though.

— Julia La Roche is a finance reporter at Yahoo Finance.

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