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Graham & Doddsville Graham & Doddsville An investment newsletter from the students of Columbia Business School Inside this issue: Issue XXVIII Fall 2016 Omaha Dinner P. 3 Stadium Capital Value Investing Management Reception P. 4 Stadium Capital Management, LLC was Stadium Capital P. 6 founded in 1997 and specializes in investing in micro/small-cap public Student companies using a rigorous, research Investment Ideas P. 20 based, long-term oriented investment Neal Nathani P. 26 strategy. Chris Weldon ’12 P. 35 Alex Seaver Brad Kent (Continued on page 6) Editors: Eric Laidlow, CFA Neal Nathani of Totem Point Management MBA 2017 Benjamin Ostrow Neal Nathani is the Chief Executive Officer, Managing Partner MBA 2017 and Portfolio Manager for Totem Point, where he is responsible John Pollock, CFA for investment decisions across a variety of equity sectors, MBA 2017 including the technology, telecommunications, business services, consumer, and media sectors. Prior to co-founding Abheek Bhattacharya Totem Point in 2013, Mr. Nathani was a Senior Analyst at Axial MBA 2018 Capital, a Long/Short equity fund seeded by Julian Robertson. Neal Nathani Prior to Axial, Mr. Nathani was a Partner at Venesprie Capital, Matthew Mann, CFA also a Tiger-seeded fund. He joined Venesprie from MBA 2018 (Continued on page 26) Adam Schloss MBA 2018 Chris Weldon ’12 of Stamina Capital Visit us at: Christopher Weldon is the Founding Member and Portfolio Manager of Stamina Capital LLC. Mr. Weldon founded Stamina www.grahamanddodd.com Rolf Heitmeyer www.csima.info Capital, LLC in 2016. Prior to founding Stamina Capital, Mr. Weldon worked as a senior analyst at Aravt Global, a long/short equity hedge fund manager from 2013 to 2016. Before joining Aravt Global, Mr. Weldon was a founding partner at Incline Global, a long/short equity and opportunistic credit fund from 2012 to 2013. Prior to Incline Global, Mr. Weldon served as a Chris Weldon consultant to both Viking Global and Hound Partners, both long/short equity hedge funds. Prior to his time investing in public markets he spent three years working as an associate at Oak Hill Capital, a private equity firm from 2007 to 2010. Prior to Oak Hill Capital, Mr. Weldon (Continued on page 35) Page 2 Welcome to Graham & Doddsville We are pleased to bring you the investing. The two partners investing in compounders, iden- 28th edition of Graham & detail their transition from tifying quality transitions, and Doddsville. This student-led in- private equity investing to the how Stamina will benefit from vestment publication of Colum- public markets in order to find both by utilizing an extended bia Business School (CBS) is co- more attractive opportunities. investment horizon. sponsored by the Heilbrunn The team discusses the evolu- Center for Graham & Dodd tion of Stadium’s strategy, the Lastly, we continue to bring Investing and the Columbia Stu- methodical research and valua- you pitches from current stu- dent Investment Management tion process, as well as the dents at CBS. CSIMA’s Invest- Association (CSIMA). firm’s reluctant, but ultimately ment Ideas Club provides CBS successful activist campaigns. students the opportunity to Meredith Trivedi, the Since our Spring 2016 issue, the practice crafting and delivering Heilbrunn Center Director. Heilbrunn Center hosted the Neal Nathani of Totem Point investment pitches. In this is- Meredith skillfully leads the seventh annual “From Graham Management shares his per- sue, we feature ideas from a Center, cultivating strong to Buffett and Beyond” Omaha spective on utilizing industry Women’s Investment Ideas relationships with some of Dinner. This event is held on the trends and rigorous research Club event, the 2016 Pershing the world’s most experi- eve of the Berkshire Hathaway to find value and growth invest- Square Challenge, and the 2016 enced value investors, and shareholder meeting and fea- ment opportunities. Neal dis- Ross Investment Competition. creating numerous learning tures a panel of renowned cusses what he learned in eval- Jocelyn Doman ’17, Maria Mul- opportunities for students speakers. Additionally, Professor uating business quality from ler ’17, William Hinman ’17, interested in value invest- Bruce Greenwald was honored witnessing the dot-com bubble Mark Shohet ’17, Kenneth ing. The classes sponsored with a Lifetime Achievement and in building complementary Chan ’18, Anton Korytsko ’18, by the Heilbrunn Center Award. teams from watching Wayne and Alexander Teixiera ’18 are among the most heavily Gretzky. Neal also shares an share their ideas for Live Na- demanded and highly rated In this issue, we were fortunate investment idea, Analog Devic- tion Entertainment (LYV), Sky- classes at Columbia Busi- to speak with four investors es (ADI), a semiconductor works Solutions (SWKS), and ness School. from three firms who provide a company that is at reduced AMERCO (UHAL). range of perspectives and invest- cyclical risk and is not com- ment approaches. Despite differ- moditized. As always, we thank our inter- ing strategies and processes, all viewees for contributing their see unique benefits from deep Chris Weldon ’12 of Stamina time and insights not only to research and having an extended Capital discusses the launch of us, but to the investment com- time horizon for investments. his fund, the evolution of his munity as a whole, and we investment strategy, and the thank you for reading. Alex Seaver and Brad Kent transition in skills and tempera- of Stadium Capital Management ment needed to go from an - G&Dsville Editors discuss their concentrated, value analyst to a portfolio manager. -oriented approach to small-cap Chris shares his experience Professor Bruce Greenwald, the Faculty Co-Director of the Heilbrunn Center. The Center sponsors the Value Investing Program, a rigor- ous academic curriculum for particularly committed stu- dents that is taught by some of the industry’s best practi- tioners. Bill Ackman and Mario Gabelli ’67 Meredith Trivedi with Professor Bruce presented as panelists at the May 2016 Greenwald at the Value Investing Omaha Dinner Program Welcome Reception Volume I, Issue 2 Page 3 “From Graham to Buffett and Beyond” Omaha Dinner 2016 Panelist Mario Gabelli ’67 interacts with other speakers Panelist Bill Ackman shares his views at the Omaha at the Omaha Dinner Dinner Budge & Carol Collins. Budge serves on the Heilbrunn Ajit Jain mingles with other investors in Omaha Center Advisory Board Professor Bruce Greenwald moderates a panel discussion with Bill Ackman, Mario Gabelli ’67, Jan Hummel, and Tom Russo Page 4 Bruce Greenwald’s Lifetime Achievement Award Presentation & Value Investing Program Welcome Reception Bruce Greenwald gives a speech after accepting his Ben Ostrow ’17, Evan Zehnal ’17, and Marc Grow ’17 at Lifetime Achievement Award the Value Investing Program Welcome Reception McCoy Jen ’17, Nick Yuelys ’17, Elizabeth Broomfield ’17, Mark Shohet ’17, Noah Scherz ’17, Nielsen Fields ’17, Alexandra Cowie ’17, and Audun Nordveit ’17 Kevin Barberich ’17, and Dan Yu ’17 Bruce Greenwald speaks with students and alumni at the Value Investing Program Welcome Reception Volume I, Issue 2 Page 5 SAVE THE DATE 20th Annual Columbia Student Investment Management Association Conference February 3, 2017 A full-day event featuring some of the most well-known investors in the industry, including keynote speakers: David Abrams of Abrams Capital Mohnish Pabrai of Pabrai Investment Funds Presented by: The Columbia Student Investment Management Association and The Heilbrunn Center for Graham & Dodd Investing Visit our website for updates: http://www.csima.info For inquiries contact: Noah Scherz [email protected] Chris Stonerook [email protected] Nick Turchetta [email protected] Page 6 Stadium Capital Management Alex began his career at the Advisory Committee program that was still a Goldman, Sachs & Co in of Coliseum Capital novelty. There were six of us New York in 1982 in Management, LLC, an in the program and there were Corporate Finance and investment firm based in two or three the year before. Mergers & Acquisitions. Stamford, CT that focuses The program grew Alex subsequently spent 10 on special situation and exponentially when they years in the private equity distressed investments in realized that slave labor was a and venture capital smaller capitalization valuable resource. It turned industry in the Bay Area at companies. out to be a great win-win for Hambrecht & Quist and everybody. We were InterWest Partners. In Prior to forming Stadium knuckleheads out of college, 1997, Alex co-founded Capital, Mr. Kent was a quickly learning the lingo and Alex Seaver Stadium Capital general partner working on interesting deals. Management, LLC, where of InterWest Partners Back then, Goldman was a he is a Managing Partner. where he focused on non- very small firm; it was a In 2005 Alex also co- technology acquisitions, partnership and had a very founded Coliseum Capital recapitalizations, and late- collegial atmosphere. I had an Management, LLC, where stage venture capital opportunity to stay there he is remains an owner as investments. From 1989 beyond the analyst program to well as a member of the to 1992, Mr. Kent was a be a “lifer.” As much as I loved firm’s Advisory Project Manager for the people I worked with Committee. Alex is also an William Wilson & there, it wasn’t what I wanted investor and/or board Associates, a commercial to do, so I applied to business member in a variety of real estate firm where he school and decided to attend earlier-stage private was responsible for Stanford. companies, primarily developing, financing and through Gold Bench leasing office development I attended Stanford GSB in the Brad Kent Capital, LLC, which Alex projects. From 1987 to mid-1980s, so it was a very also co-founded. 1989, Mr. Kent was a interesting time for venture member of the Morgan capital and technology out Alex graduated from Stanley Merchant Banking there.
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