Third Time The Charm For Hedge Fund Manager Dreaming of Being NHL Owner

Posted on January 8, 2015January 8, 2015 by admin

Brokerdealer.com update courtesy of FINalternatives.

New Arizona Coyote owner, Andrew Barroway (Left)

After two failed attempts, a managing partner at a hedge fund has finally reached an agreement with the NHL team Arizona Coyotes to become a team owner.

Call it a “Miracle on Ice.”

In his third attempt, hedge-fund manager A

has finally reached an agreement to acquire a majority share of an NHL franchise.

Barroway, a managing partner of Merion Investment Management, now owns 51% of the Arizona Coyotes and is the team’s chairman and governor.

This was the third attempt by Barroway to purchase an NHL team in the last two years. In 2012, a deal with the New Jersey Devils fell through. Last summer, he was certain he’d acquired a majority stake in the New York Islanders, but the team’s owner Charles Wang decided to sell to Jonathan Ledecky and Scott Malkin at the last-minute. This prompted a lawsuit by Barroway against the Islanders owner; however, the case was dropped as the Merion partner began his latest pursuit in Arizona.

Still, it wasn’t easy for Barroway to complete his three-year journey toward NHL ownership. Last month, multiple sources indicated that the deal was in jeopardy on news that Barroway was prepared to back out of a reported $155 deal. The Globe and Mail’s James Mirtle wrote that Barroway’s principle interest in “buying [the team] was to flip it.”

The New York Post reported in the fall that Barroway planned to resell the team to an ownership group that wants to move the team to Las Vegas. That news coincided with a report that NHL committed to a Las Vegas owner’s plan to hold a season-ticket drive to measure possible interest for a team in Nevada.

However, Barroway denied speculation that he would flip the team during an interview with Fox Sports last week.

“I am buying this team because I am a lifelong sports and hockey fan,” Barroway said. “It has always been my dream to become an owner. I want to bring a winner to the Valley. That [report] couldn’t be any more false. I am thrilled to be here and am thrilled to be an owner and would not have gone through this difficult process in buying a team just to go flip it.”

Barroway said he plans on being an active owner while remaining engaged in his day-to-day role at his fund. Merion Investment Management has more than $1 billion in assets under management.

For the original article from FINalternatives, click here.

BrokerDealers Gear Up For More Merger-Arb Deals

Posted on December 16, 2014December 16, 2014 by admin

BrokerDealer.com blog update courtesy of FINAlternatives and originally published by Bloomberg LP

With the economy fully recovered from the financial crisis, Brokerdealers, involved in merger-arbitrage funds, are taking higher risks that are giving a much higher reward.

Merger-arbitrage traders didn’t have enough risk last year. This year, they got more than their share — and it’s not going away.

Companies announced $2.8 trillion of acquisitions, making 2014 the busiest year since before the financial crisis. Unprecedented amounts of money were spent in some industries, such as pharmaceuticals, and the transactions skewed larger than at any other time this century, according to data compiled by Bloomberg. The slew of deals gave merger-arbitrage traders plenty to wager on, after last year’s scarcity of profit opportunities.

The explosion of megamergers brought volatility back to the investing strategy. The deals have been fraught with challenges, from regulatory scrutiny to the plummeting price of oil and the government’s attempt to deter tax inversions. Betting on them didn’t always pay off. More than $100 billion of potential takeovers unexpectedly blew up, like when drugmaker AbbVie Inc. called off its $55 billion purchase of Shire Plc. That burned merger-arbitrage funds, some of which will end the year at a loss even as stocks around the world surge.

“Drought conditions turned into basically flood conditions this year,” Louis Meyer, a New York-based event-driven analyst for Oscar Gruss & Son Inc., said in a phone interview. “Volatility is good, but it can be a double-edged sword. The positive aspect is you do have deals and the trend seems to be continuing. On the other hand, you’ve had real risk emerge and portfolio managers can no longer work on cruise control.”

For the original article from FinAlternative, click here.

Pershing Square Will List Permanent Capital Vehicle This Year

Posted on August 14, 2014 by admin

BrokerDealer.com blog post courtesy of extract from FinAlternatives.com

Pershing Square Capital Management plans to move forward with a listed permanent capital vehicle later this year, the $15 billion hedge fund told investors.

The New York-based firm said it will raise an undisclosed amount in an initial public offering later this year. The money would serve to protect Pershing Square’s investments against redemptions.

“Because we are an active, control and influence-oriented investor, we have avoided being fully invested because of the risk of investor redemptions,” firm founder William Ackman wrote. “We will hopefully begin to address this issue with the initial public offering of Pershing Square Holdings Ltd., targeted for later this year, which will increase the amount of our capital that is permanent.” Continue reading →

Accredited Investor Rule Subject To Change Thanks to Crowdfunding and JOBS Act

Posted on July 28, 2014July 28, 2014 by admin

Brokerdealer.com blog update courtesy of extract from FINalternatives.com

The Securities and Exchange Commission is considering changes to its 30-year-old definition of “accredited investor” that could have serious implications for the crowdfunding industry.

Accredited investors are permitted to participate in private securities placements, and since the passage of the JOBS Act in 2012 opened the door to general solicitation for investors, many have been finding those opportunities through crowdfunding platforms.

The current definition of an accredited investor, written in 1982, says it is a person with earned income in excess of $200,000 (or $300,000 with a spouse) in each of the prior two years or one with a net worth over $1 million (alone or with a spouse), excluding the value of his/her primary residence.

Those pushing for change say the income thresholds have not been updated for inflation—that in today’s dollars, $200,000 and $300,000 would be $500,000 and $700,000.

But critics, like Brendan Ross, president of Direct Lending Investments, say such a change would halve the number of accredited households in the U.S., which today make up, by the SEC’s own calculations, 7.4% of all households.

Ross, who manages a short-term, high-yield small business loan fund, told FINalternatives that as regulators “become more educated on the implications of such a change, they will be less likely to move forward.”

“This would negatively impact the investment management industry as the number of accredited investors would sharply decrease. It’s unlikely that the SEC would want to impinge upon the private placement industry, which is the source of most financial innovation. Value investing, small companies, emerging markets, commodity funds, and REITs all started with accredited investors putting money into private placement vehicles, which then evolved into mutual funds.”

For the full story, please visit www.finalternatives.com