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Alternative Market Briefing

Four big U.S. hedge funds lose $900m over Allergan

Monday, April 11, 2016

Komfie Manalo, Opalesque Asia:

Four of the biggest hedge funds in the U.S. including Paulson & Co, Third Point, Viking Global, and Elliott Management lost nearly $900m in value last week as shares of Allergan plunged after the failed $160bn merger with Pfizer, reported the Financial Times.

Shares of Allergan dropped 15% to $236 from $277 after news of the failed merger emerged following the announcement of new rules to crack down on tax "inversion" deals.

The mega-deal was pulled off after the U.S. Treasury drafted new rules to deter companies from moving their headquarters to countries with a more favorable tax regime, so called 'tax inversions', echoing the failed merger between Shire and ABBVie in 2014 which hurt many funds.

Allergan is one of the top 10 most widely held stocks amongst U.S. hedge funds and is one of the most "crowded" bets amongst funds across the globe, data from UBS said.

Regulatory filings showed that Viking held 1.5% of Allergan’s shares while Paulson held 1.4%. The shares were estimated to value at about $1.6bn and $1.5bn, but industry experts say Viking and Paulson would have lost more than $200m each with because of the failed take-over.

A separate report by ......................

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