The Hedge Fund Report: Vultures Feed at Dana

An Intrawest insider says that all options are on the table, not only a sale, but everything from merger to acquisition to partnership.

"While we appreciate and listen to the input of all shareholders, the letter from Pirate Capital changes nothing about the broad strategic review that our board has initiated and that we announced earlier this week," said the company in an official response to Pirate's filing.

Pirate is more specific and is shopping for potential bidders. It says in its filing that it has spoken to various parties willing to acquire Intrawest at a "substantial premium" and that the "fair valuation" of the stock is $45. The stock recently traded for $31.68.

Dissent

There is a disconnect of sorts between what commissioners of the Securities and Exchange Commission say and what the staff is doing.

Chairman Christopher Cox took the unusual step last week of rebuking the agency's enforcement people for issuing subpoenas to journalists.

Regarding hedge funds, Cynthia Glassman publicly lashed out at the hedge fund registration rule that recently went into effect. "In my view, the registration requirement we adopted (and that I voted against) was not well thought out [...] The unintended yet totally predictable outcome here is that global funds are excluding U.S. investors and that U.S. domestic funds are lengthening their lock-up periods or closing their funds."

Hedge funds turning into private equity-like vehicles as a result of the rule? There has been a lot of ink spilled on the subject.

Given the increased interest in India, it comes as no surprise that managers dedicated to Indian stocks would flourish. Recently, Permal Group, a multibillion-dollar fund of hedge funds manager, launched Permal India. "India is an attractive market for hedge funds and we are seeing a growing number of hedge funds in India," says Omar Kodmani, Permal's senior executive officer. Just last week, Carret Asset Management, a private investment advisory firm, launched Carret Global India Fund, a fund-of-funds vehicle also focused on investing in Indian hedge funds.

Gautam Prakash, manager of Cambridge, Mass.-based Monsoon Capital, a hedge fund manager investing exclusively in small-cap Indian stocks, says his fund is closing to new investors. The $300 million fund returned 67% since inception in December 2004. "We take substantial ownership positions in small companies that are not very liquid; therefore, there is only so much money you can put in," says Prakash. He invests $10 million to $15 million per company and prefers not to own more than 25 different names.

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