Steven A. Cohen of SAC Capital Advisors does not appear concerned about the ongoing insider trading investigation, with plans to show up at a hedge fund conference in Florida on Monday after making the rounds in Davos, Switzerland, last week. But beneath the calm exterior, employees and lawyers of SAC are working hard to contain the fallout from the Justice Department’s inquiry into the firm, DealBook’s Peter Lattman reports.
The question looming over Mr. Cohen’s fund is whether clients will stick around or pull their money. A prominent departure came last week, when a Citigroup unit that manages money for wealthy families disclosed it was withdrawing $187 million. Though the withdrawal represents a small fraction of SAC’s $14 billion in assets, “the Citigroup decision stung, say people close to SAC’s business because of the longstanding and lucrative relationship between the bank and the fund,†Mr. Lattman reports. “Another concern, said these people, is that the move could influence other large SAC investors currently weighing whether to keep their money at the fund.†Investors have a deadline of Feb. 15 to ask for their money back.
The firm is also worried about the effect on employees. This month, SAC told its portfolio managers that it would increase year-end bonuses by three percentage points in an effort to prevent them from leaving. “This has always been a stressful place to work,†said an SAC employee who requested anonymity because he was unauthorized to speak publicly about the fund. “Now it’s just more stressful.â€
SMALL INVESTORS WARM TO STOCKS  | After fleeing equities after the financial crisis, individual investors are now pouring money into stock mutual funds! and pushing the market close to its highest nominal level ever. On Friday, the Standard & Poor’s 500 broke 1,500 to finish at 1,502.96 points. The optimism of the last few weeks â€" fueled by a sense that crises are dissipating â€" is a significant change from recent years. But some market experts warn that the current rally may be driven by an investing public that fears missing out, Nathaniel Popper writes in The New York Times. “Americans’ latest stock-market romance is young, and it could easily fade before it becomes something more serious. Some market watchers warn that given the big run-up in prices, the market is already ripe for at least a brief correction.â€
TWITTER COMMANDS $9 BILLION VALUATION  | Twitter continues to grow up. BlackRock, the huge asset manager, is buying an $8 million stake in Twitter that values the company at more than $9 billion, according to Reuters. That is an increase over Twitter’s reported $8.4 billion valuation in 2011. In the current deal, early Twitter employees will be able to sell their holdings, and the company itself will not raise money, according to The Financial Times.
ON THE AGENDA  | The American Securitization Forum conference in Las Vegas this week discusses the challenges facing the securitization industry. Thomas Curry, the comptroller of the currency, delivers the conference’s keynote address at 11:20 a.m. Caterpillar rep! orted earnings on Monday morning, and Yahoo announces results on Monday evening. Data on pending home sales for December is released at 10 a.m.
AT DAVOS, BANKERS FRET OVER THE FUTURE  | One question seemed to dominate the Wall Street executives who gathered for the World Economic Forum in Davos: Is the financial industry experiencing a brain drain Reuters writes: “The issue, executives say, is not pay, but how much scope there is to innovate and build businesses, which is why more bankers and traders are leaving the big Wall Street firms for Silicon Valley, joining private investment partnerships like hedge funds and private equity funds or going into energy and other industries.â€
Still, the uncertainty didn’t dampen the mood too much. Parties have not completely died out in Davos, as evidenced by a bash on Friday thrown by Sean Parker, a founder of Napster and former president of Facebook. The likes of Lloyd C. Blankfein, Marissa Mayer and Daniel S. Loeb gathered near taxidermy animals with lasers coming from their eyes. Andrew Ross Sorkin singled out the performance by John Legend as particularly memorable.
FROM BLOOMBERG TO JOHNS HOPKINS, A $1.1 BILLION THANK-YOU  | Michael R. Bloomberg, the New York City mayor, made a $! 350 milli! on gift to Johns Hopkins University on Sunday, bringing the sum of his donations over the past four decades to $1.1 billion, Michael Barbarbo reports in The New York Times. “That figure, kept quiet even as it transformed every corner of the university, makes Mr. Bloomberg the most generous living donor to any education institution in the United States, according to university officials and philanthropic tallies.†Mr. Bloomberg, who graduated in 1964, explained his fidelity to the university in personal terms. “Let’s be serious â€" they took a chance on me,†he said.
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US Airways and AMR Said to Approah a Pact  | Reuters writes: “US Airways Group Inc. and American Airlines parent AMR Corp. are in the final stages of negotiating a merger, with the final price and management structure still to be resolved, four people familiar with the matter said.†REUTERS
Alcohol Giants Scout for Deals in Asia  | Reuters reports: “The biggest global alcohol companies are sizing up buyout and tie-up opportunities in China, India, South Korea and Vietnam, keen to profit from a $258 billion Asian market that is growing twice as fast as the rest of the world.†REUTERS
Nexen and C! nooc Post! pone Deal’s Closing  | The companies said they had agreed to extend the closing of Cnooc’s takeover of Nexen by 30 days, to March 2, Reuters reports. REUTERS
As Fraser & Neave Nears a Takeover, Chairman May Leave  |Â
REUTERS
Trust in Banking Is Slow to Recover Where Crisis Raged  | The New York Times columnist Floyd Norris writes: “In countries whose financial systems id not blow up during the worldwide recession, trust has remained high. But in some European countries where the banks were generally viewed as having caused the crisis, trust plunged and has not recovered.†NEW YORK TIMES
Amid a Shake-Up, JPMorgan’s Risk Officer Takes a Leave  | JPMorgan Chase’s chief risk officer is taking a temporary sabbatical, the latest move in an extensive reshuffling of JPMorgan’s executive suite after a botched credit bet that has cost the bank more than $6 billion. DealBook Â'
Bank of America Said to Shift Derivatives t! o Britain!  | Bank of America has started moving more than $50 billion of derivatives into its British subsidiary from its Dublin-based operation, a move that will let the bank “benefit from tax breaks†stemming from accumulated losses, The Financial Times reports. FINANCIAL TIMES
On Wall Street, Putting Shareholders Second  | If the financial crisis made anything clear, Antony Currie of Reuters Breakingviews writes, it is that banks should be forced to defend their business models and corporate governance â€" regularly. DealBook Â'
On Lookout in Davos for Next Growth Storyin Emerging Markets  | An economic renaissance in Mexico, Chile, Colombia, Panama and Peru has become the focus in Latin America, and sub-Saharan Africa has also flashed signs of promise. DealBook Â'
Citigroup Aims for Top Spot in Ranking of Foreign-Exchange Firms  | Bernie Sinniah, Citigroup’s head of foreign-exchange sales, appears as a comic book superhero in a campaign by the firm to try to win the top spot in a ranking by Euromoney magazine, The Wall Street Journal reports. WALL STREET JOURNAL
How Bright Horizons Took Care of Bain Capital Over the Years  | Bright Horizons’ successful initial public offering on Friday was the latest chapter in the day care center chain’s long and lucrative relationship with Bain Capital. DealBook Â'
Terra Firma Said to Plan Fund-Raising  | Terra Firma, the private equity firm run by Guy Hands, is “pressing ahead†with with plans to raise a roughly $4 billion fund to focus on renewable energy infrastructure assets, according to The Financial Times. FINANCIAL TIMES
Blackstone Said to Seek $450 Million to Refinance Hotel Debt  |Â
BLOOMBERG NEWS
Bridgewater’s Dalio Predicts a Broad Investment Shift  | Bloomberg News reports: “Ray Dalio, founder of Bridgewater Associates, the world’s biggest hedge fund, said 2013 will be a ‘game changer’ for the economy as investors reallocate money after risks such as Europe’s sovereign debt crisis receded.†BLOOMB! ERG NEWS
A Hedge Fund Dogfight, Live, Mesmerizes Wall Street  | Years of bad blood between two hedge fund magnates spilled publicly onto CNBC’s airwaves, as Carl C. Icahn derided his younger counterpart as a “crybaby,†and William A. Ackman declared the veteran investor a “bully.†DealBook Â'
Goldman Sachs to Sell $1 Billion Stake in Chinese Bank  | Goldman Sachs is selling a $1 billion stake in Industrial and Commercial Bank of China, the largest Chinese bank. DealBook Â'
Zoetis, Unit of Pfizer, Aims for $2.2 Billion I.P.O. This Week  |Â
WALL STREET JOURNAL
Quintiles Transnational Said to Hold Talks With Banks Over I.P.O. Â |Â The Quintiles Transnational Corporation, which is backed by Bain Capital and TPG Capital, held talks last week to appoint banks for an I.P.O., Reuters reports, citing unidentified people familiar with the matter. REUTERS
Silicon Valley Lobbies Against European Privacy Proposals  | The New York Times reports: “Silicon Valley technology companies and the United States government are pushing hard against Europe’s effort to enact sweeping privacy protection for digital data.†NEW YORK TIMES
Court Decision Casts Doubt on Appointment of Consumer Watchdog  | A ruling by a federal appeals court on Friday called into question nearly two centuries of presidential “recess†appointments, including that of Richard Cordray as director of theConsumer Financial Protection Bureau, The New York Times reports. NEW YORK TIMES
At the Top of Mary Jo White’s To-Do List  | President Obama’s nominee to lead the Securities and Exchange Commission, Mary Jo White, should focus on scrapping the agency’s practice of allowing companies and individuals to settle cases against them without admitting or denying the findings, The New York Times columnist Gretchen Morgenson writes. NEW YORK TIMES
Inside the Fed, Debate Over When to Slow Asset Buying  | The ! debate wi! thin the Federal Reserve “is once again shifting from whether the Fed should do more to stimulate the economy to when it should start doing less,†The New York Times reports. NEW YORK TIMES
Trade Official Says U.S. Wants Deal With Europe  | Ron Kirk, the United States trade representative, says President Obama is committed to an agreement to smooth trade with the European Union, but only if it can overcome objections from farm groups and win Congressional approval. DealBook Â'
Global Rule Maker Defends Regulatory Efforts From Criticism  | Stefan Ingves, the chairman of the Basel Committee on Banking Supervision, answered criticism on Tuesday that global rule makers had gone soft on banks, arguing that lenders need more time to adjust to new regulations. DealBook Â'
A Technical Debate With Broader Implications for Deal-Making  | The emerging issue of “don’t ask/don’t waive†standstills is a debate that only a Delaware deals lawyer could love. But it has the potential to change the way that public companies are sold, Steven M. Davidoff writes in the Deal Professor column. DealBook Â'
