Debra Fine, a former stock picker for the late Laurence Tisch, has lost more than 70 percent of her investment in MF Global Holdings Ltd. (MF) after increasing her stake just before the shares collapsed.
Fine Capital Partners LP and its affiliates spent about $21.2 million to purchase 4 million MF Global shares from Aug. 5 through September, according to regulatory filings. Fine’s hedge fund, based in New York, now ranks as MF Global’s second-largest outside shareholder, with a 7.4 percent stake, trailing only RS Investments of San Francisco, according to data compiled by Bloomberg.
MF Global, the New York-based futures broker run by Chairman and Chief Executive Officer Jon Corzine, reported its largest ever quarterly loss this week and also had its credit rating cut by Moody’s Investors Service. The stock closed yesterday at $1.70 in New York trading, and has declined 59 percent during October.
Fine Capital spent a total of about $70.3 million to acquire 12.2 million MF Global shares, or about $5.79 each, according to filings with the U.S. Securities and Exchange Commission. The fund initially reported purchasing 4.16 million MF Global shares during the fourth quarter of 2008.
Fine declined to comment, according to a representative in her office.
The hedge fund has been increasing its U.S. equity holdings, which totaled $894 million at the end of June, more than double the $312 million reported a year earlier, according to quarterly Form 13Fs filed with the SEC. In August, the fund boosted its stake above the 5 percent threshold at four companies: Citizens Republic Bancorp Inc., New York & Co., Scientific Games Corp. and MF Global.
Before forming her hedge fund in late 2004, Fine was director of global equities at Loews Corp. (L), the New York-based holding company co-founded by Laurence and his brother Preston Robert Tisch, who is also deceased. Loews’ investments include a 90 percent stake in CNA Financial Corp. (CNA), a Chicago insurer, and a 50 percent stake in Diamond Offshore Drilling Inc. (DO) of Houston.
Laurence, who died in November 2003 at the age of 80, used Loews to acquire a 17 percent stake in CBS Inc. and later became chairman and chief executive officer of the television broadcasting company. He sold CBS in 1995 for $5.4 billion to Westinghouse Electric Corp., which was later acquired by Viacom Inc.
Fine’s hedge fund follows a long-short equity strategy, meaning it makes traditional investments in stocks and also bets against some equities through short-selling, a trading technique that employs borrowed shares to generate profits when a company declines.
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