J. Tomilson Hill, a well-known Wall Street deal maker in the 1980s who had a role in the book “Barbarians at the Gate,†has reinvented himself by applying his deal-making skills to a different business, Randall Smith reports in DealBook. Though he was ousted as co-chief executive of Lehman Brothers in 1993, he has recently gained prominence running the hedge-fund-of-funds business at the Blackstone Group, where he is the third highest-paid executive officer.
Since 2000, Mr. Hill has taken the hedge-fund-of-funds business from barely a blip on the radar screen to the No. 1 spot, with $53 billion in assets, Mr. Smith reports. At a presentation for analysts in May 2012, Mr. Hill described his business as “the largest investor in hedge funds in the world.†Mr. Smith writes: “Mr. Hill has succeeded not by posting titanic returns but by offering the funds to institutions like public pension funds as a safer alternative to stocks without as much volatility. Its $8 billion flagship Blackstone Partners Offshore Fund returned 6.3 percent annually from 2000 through 2012, according a Blackstone presentation in mid-2013 obtained from another investor.
“This year, Blackstone has focused on the market for individual investors who may want such hedge fund vehicles in their portfolios. In August, it started a $1 billion mutual fund for wealthy clients of Fidelity Investments. Institutions have 25 percent of their assets in alternatives to stocks and bonds, like private equity, hedge funds and real estate, but individuals have only 2 percent, which Blackstone’s president, Hamilton E. James, says ‘shows you the massive potential that retail has.’â€
WITNESS TELLS OF PRESSURE FROM SAC TRADER TO GET INSIDER DATA  | “Between 2007 and 2009, Jon Horvath developed a regular routine as a trader at SAC Capital Advisors: obtaining confidential information about Dell Inc.’s financial results well before the computer company’s quarterly disclosures,†DealBook’s Michael J. de la Merced reports. Those efforts, Mr. Horvath told a jury on Monday in a Manhattan federal district courtroom, were made with the full knowledge of his boss, Michael S. Steinberg.
“During his third day of testimony as a prosecution witness in Mr. Steinberg’s insider trading trial, Mr. Horvath described repeatedly gleaning early peeks into Dell’s sales. Knowing that information well before the market gave SAC an edge in betting against the company’s stock. That helped the hedge fund, particularly in the summer of 2008,†Mr. de la Merced writes. “The lengthy testimony is meant to buttress federal prosecutors’ contentions that Mr. Steinberg repeatedly encouraged Mr. Horvath to cross legal lines in pursuit of information with an edge.â€
CHERNIN INVESTS IN ANIME Â |Â
Peter Chernin, the former News Corporation executive who now runs his own media investment firm, has invested in high-flying start-ups like Pandora, Tumblr and Flipboard. For his latest investment, he has turned to Japanese anime, DealBook’s David Gelles reports. On Monday, the Chernin Group acquired a majority stake in Crunchyroll, a San Francisco-based company that streams anime over the Internet. Terms of the deal were not announced, but a person briefed on the matter said the investment was worth a little less than $100 million.
“This deal is about two things,†Mr. Chernin said in an interview. “They have built an extremely impressive anime offering. Hard-core anime fans love it. At the same time, they deserve credit for building a great subscription video platform.â€
ON THE AGENDA Â |Â
The Brixmor Property Group reports earnings after the market closes. Karen Katz, chief executive of the Neiman Marcus Group, is on CNBC at 10:10 a.m. The bankruptcy lawyer Harvey R. Miller is on Bloomberg TV at 11:30 a.m.
APPLE BUYS A SOCIAL MEDIA ANALYTICS FIRM Â |Â Apple, a company not known for being social, confirmed on Monday that it had bought Topsy Labs, a research firm that could help Apple better understand what people are talking about on social media networks like Twitter, Brian X. Chen and Vindu Goel report in The New York Times.
“Topsy focuses on analyzing the half a billion messages sent over Twitter every day. The company has indexed every tweet ever sent and has made them searchable, much like Google does for the web. The company also helps clients analyze tweets for various business trends,†Mr. Chen and Mr. Goel write. “While Apple has built some of its software to work with Twitter’s service, it remained unclear why a hardware maker like Apple would be interested in Topsy. Apple was not giving any clues.â€
Pearson to Buy English-Language Education Firm in Brazil  | Pearson has agreed to buy Grupo Multi of Brazil, an English-language training company, for about 440 million pounds ($721 million), Bloomberg News reports. BLOOMBERG NEWS
Dow Chemical Plans to Shed $5 Billion of Assets  | The possible sale or spinoff of assets - including chlorine production facilities and epoxy businesses - is the latest move by a big industrial company to try to streamline itself. DealBook »
New F.C.C. Chief Pledges to Protect Competition  | The New York Times reports: “The chairman of the Federal Communications Commission said on Monday that he intended to aggressively promote and protect competition in the telecommunications industry, including making sure that smaller mobile phone companies have a reasonable chance of buying public airwaves in auctions next year.†NEW YORK TIMES
Rohatyn Group Closes Acquisition of Citi Unit  | The Rohatyn Group announced it had completed its acquisition of Citi Venture Capital International, a private equity investment firm focused on emerging markets. NEWS RELEASE
Goldman and JPMorgan Satisfy Fed With Capital Plans  | On Monday, the two banks effectively put concerns of the Federal Reserve behind them after the regulator said it did not object to new capital plans that the firms had resubmitted. DealBook »
R.B.S. to Compensate Card Holders After Online Error  | A systems error left customers unable to use their credit and debit cards for about three hours on Cyber Monday. DealBook »
Lloyds Bank Names New Chairman  | Norman Blackwell, a current director of the Lloyds Banking Group, will become its chairman next year, succeeding Winfried Bischoff. DealBook »
UBS to Buy Back Bonds to Reduce Balance Sheet and Expenses  | The Swiss bank said it expected to incur a small loss on the buyback, but believed that would be offset by a decrease in its future interest expense. DealBook »
Sale to NCR Is a Quick, Profitable Flip for a Private Equity Firm  | By selling Digital Insight for $1.65 billion after buying it 124 days earlier for $1.025 billion, Thoma Bravo appears to be an incredibly savvy buyer and seller. DealBook »
Putting Hedge Fund Performance in Context  | Bloomberg Businessweek writes: “Hedge funds overall were up around 6 percent as of the end of September, according to a recent report by Goldman Sachs, which tracks the performance of 783 different funds. Under normal circumstances, that might not be so bad, but it comes during a year when stock market indices have mostly shot upwards.†BLOOMBERG BUSINESSWEEK
Research Reports Throw Some Cold Water on Twitter  | Reuters reports: “Twitter Inc. shares slipped on Monday after some of the five lead underwriters of its initial public offering said the social media firm may not achieve Facebook-like scale and its stock may not rise much higher.†REUTERS
From Amazon, a Masterful Public Relations Move  | “Package delivery by drone is a loopy idea, far-fetched and the subject of instant mockery on Twitter â€" but it is hard to deny its audacity,†The New York Times writes. NEW YORK TIMES
Amazon’s Blue-Sky Thinking  | Drone deliveries seem as overly optimistic as investors’ expectations of Amazon overall, Robert Cyran of Reuters Breakingviews writes. The company’s market value has ballooned to $180 billion, even though big profits are always hovering in the future. REUTERS BREAKINGVIEWS
New York Subpoenas Websites in an Effort to Curb Payday Lenders  | The move targeted 16 so-called lead generator websites, which sell reams of consumer data to payday lenders. DealBook »
At Cravath, Bonuses Are Said to Be Flat This Year  | The law firm Cravath, Swaine & Moore “plans to pay its associate attorneys the same end-of-year bonuses it paid in 2012, reflecting a cautious mode after a year in which many big law firms are on track to make only modest revenue gains,†The Wall Street Journal reports, citing an internal memo. WALL STREET JOURNAL
Criminal Trial Ordered for EADS Shareholders  | The New York Times reports: “A French court on Monday ordered the German carmaker Daimler and the French media conglomerate Lagardère to face a criminal trial on allegations of insider trading in the 2006 sale of shares in the European aerospace and defense group EADS.†NEW YORK TIMES
European Watchdog Warns of Possible Action Against Ratings Agencies  | The European Securities and Markets Authority says its investigation into Fitch, Moody’s and Standard & Poor’s has revealed issues in sovereign rating processes. DealBook »
Bank of America Reaches Settlement With Freddie Mac  | The bank will pay Freddie Mac $404 million to settle all residential mortgage repurchase agreements and other claims related to loans sold from 2000 to 2009. DealBook »
Fines, Without Explaining How They Were Calculated  | JPMorgan Chase’s settlements with regulators are good examples of the significant payments required as part of the atonement for misdeeds, Peter J. Henning writes in the White Collar Watch column. But how did the penalties end up to be such nice round figures? DealBook »
