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12 Oct 2006

Activist Hedge Fund reports 5% Ownership of Applebees

Breeden Capital Management LLC, the activist hedge fund of former Securities and Exchange Commission Chairman Richard Breeden, reported that it owns 3.9 million shares, or 5.24% of Applebee’s International Inc.’s common stock.

In a filing with the Securities and Exchange Commission, Breeden Capital said that it had bought the shares due to their undervalued price listings, not to retain control. The purchase price for the shares was $77.7 million.

Breeden Capital said it had spoken with Applebee’s CEO Dave Goebel and recommended to Applebee’s CEO Dave Goebel, that the company should refranchise and modify executive compensation practices to increase shareholder value.

Between Sept. 18 and Sept. 29, Breeden Capital bought about 740,000 shares of Applebee’s stock for about $22 a share, or a total of $16.3 million, the filing said.

Breeden Capital Management is registered as an investment adviser to Breeden Partners LP as well as Breeden Partners Ltd., a private fund organized as an exempted company under the laws of the Cayman Islands, according to filings with the SEC.

GLG Fund Manager to set up Geneva Hedge Fund

The former manager of GLG Partners, worth $16 billion and Europe’s biggest hedge fund, is starting up a new fund. The hedge fund, based in Geneva, is likely to start trading next year, after the expiration of a noncompete agreement with GLG.

He is in the process of recruiting around 25 staff, and has so far chosen around 12. The new asset management firm is said to be worth about $2 billion.

Hedge fund manager Philippe Jabre was fined 750,000 pounds by the FSA earlier this year, making it the largest ever on an individual. The charge was insider trading on a convertible bond sale for Japan’s Sumitomo Mitsui Financial Group.

Because the offshore entity is legally separate from the U.K. hedge fund, Jabre had previously argued that the FSA had no jurisdiction in Japan, but the Financial Services and Markets Tribunal said in a ruling it was satisfied the FSA did have jurisdiction because the bonds were also traded in London and ultimately controlled by the U.K. hedge fund.

Assets in U.K. hedge funds have nearly quadrupled, to $128.9 billion at the end of the second quarter from $33.1 billion in 2000, according to Hedge Fund Research Inc., a Chicago-based firm that compiles data on hedge funds. That is nearly 11 percent of the $1.2 trillion invested in hedge funds world-wide, according to HFR.