Yale’s Swensen Undergoing Cancer Treatment

This post is by Michael Corkery from Deal Journal

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David Swensen, Yale University’s chief investment officer, who pioneered an investment strategy for endowments that favors private equity and other alternative assets over stocks and bonds, is currently undergoing treatment for cancer.

A university spokesman said in a statement that Swensen would continue to direct the university’s $19 billion endowment, but was taking a temporary leave from his teaching duties.


Texas Pension Fund Takes Stake in Bridgewater

This post is by Michael Corkery from Deal Journal

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Jesse Neider for the Wall Street Journal
Ray Dalio

The Teacher Retirement System of Texas has taken an equity stake in one of the world’s largest hedge funds, Bridgewater Associates.

In a deal finalized earlier this week, the approximately $100 billion pension fund will own a small share of Bridgewater, according to a person familiar with the matter.

The equity stake comes as Bridgewater’s founder, Ray Dalio, seeks to reduce his ownership in the Westport, Conn., firm.

Mr. Dalio, who owns about 60% of Bridgewater, may reduce his stake to about 20% over the next 10 years, people familiar with the matter say. Several top executives at Bridgewater have been buying stakes as part of this transition.

In a letter on Friday, Bridgewater told clients that the sales are part of a “10-year plan to transition Bridgewater from being run by Ray, to being independent of Ray.”

The firm added in the letter that the Mr. Dalio has no plans to retire or change his involvement with the firm in any way.

A number of public pensions have been increasing their exposure to hedge funds and other so-called alternative investments recently. But the Texas Teachers deal represents an unusual move by a pension plan to take an equity stake directly in a hedge fund.

A spokesman at Texas Teachers could not be immediately reached for comment.

UPDATE: A spokeswoman for the Teachers Retirement System of Texas in an email said that the pension fund had voted to invest about $250 million in Bridgewater at a meeting on Thursday.

For Zynga Brass, This Isn’t Monopoly Money

This post is by Michael Corkery from Deal Journal

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Associated Press
William “Bing” Gordon

The Zynga IPO is about to make some rich Silicon Valley veterans even richer.

Here’s a list of company insiders who stand to collect big sums.

The values don’t account for some inevitable dilution from an offering. But for now, these figures look pretty enviable on paper.

Mark Pincus: The CEO and co-founder owns about 91 million in Class B shares, or about 16% of these shares. If the company gets valued at $20 billion, that would put his stake at a value of at least about $3.2 billion. (This doesn’t include the 20 million in Class C shares Pincus owns.) Not a bad haul for the 45-year-old former Wall Street analyst and Wharton grad who created websites like MafiaWars, in which players can order hits on Facebook friends.

William “Bing” Gordon: This Zynga director owns about 61 million shares, or about 10% of Class B Shares, which could be worth some $2 billion at a $20 bln valuation. He served as chief creative officer at Electronic Arts for 10 years starting in 1998. His favorite video games include World of Warcraft and the Sims.

Brad Feld: A director and MIT grad, he owns 6% of the company with 34.6 million Class B shares. He’s a co-founder of venture firm Mobius.

Owen Van Natta: The chief business officer, he used to be the chief revenue officer at Facebook and then went to work at MySpace as chief executive for only six months before in April 2009. He has stock and option awards currently worth about $43 million according to Friday’s filing.

Jeffrey Katzenberg:  The DreamWorks co-founder, has 388,000 shares of Zynga.

Zynga’s initial prospectus indicates that some current owners may choose to sell in the IPO, though it doesn’t specify which ones. A spokeswoman for Zynga declined to comment beyond the filing.

The ‘Other’ Meredith Whitney in His Life

This post is by Michael Corkery from Deal Journal

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courtesy of the Larkin family
Meredith Whitney Larkin, with her father, Meredith Whitney critic Dick Larkin.

Some municipal bond salesman and bankers get so worked up about analyst Meredith Whitney and her apocalyptic predictions that they can’t bare to utter her name.

But Richard Larkin, a credit analyst at investment banking firm Herbert J. Sims & Co. has no choice but to speak the unspoken, particularly at home.

His daughter’s first and middle name is Meredith Whitney.

The family connection is ironic because Mr. Larkin has been one of the muni bond industry’s biggest critics of Ms. Whitney, the analyst. He has appeared on CNBC and Fox Business Network to debunk her dire predictions of defaults. (The analyst version of Meredith Whitney declined to comment)

Mr. Larkin’s criticism of Ms. Whitney became so intense that his daughter, a recent college grad, recently stuck up for her namesake.

“One day, she said to me, ‘Dad could you go easy on her. She’s just…trying to make a name for herself,” Mr. Larkin told a muni bond conference last week in Miami Beach, co-hosted by the Bond Dealers of America and the Bond Buyer trade publication.

Bloomberg News
…and Meredith Whitney

Despite his daughter’s admonishment, Mr. Larkin didn’t hold back.

He moderated a conference panel which spent much of the time discussing why Ms. Whitney’s prediction of numerous large municipal defaults is wrong.

Industry optimists likely felt bolstered today from the latest default numbers from S&P Indices showing that the pace of defaults in the first quarter, 0.48%, is exactly as it was in the first quarter of 2010.