MARCH 17, 2021 SPAC Tidal Wave Lifts Return Expectations fund managers with -picking strategies see lasting opportunities to 6 PLAN CONSULTANTS boost their trading profits amid an ongoing boom in special-purpose acquisition companies. 2 Coatue Alum Closing In on Launch The thought is that with SPAC launches continuing in tremendous numbers — 2 Ibex Betting on Autonomous Cars and with many of the vehicles yet to purchase their underlying businesses — the sector’s growth will create a larger universe of potential long and investments. 3 EJF Opens SPAC Fund to LPs Firms including Magnetar Capital and Millennium Management already have deployed billions of dollars into early SPAC trades, according to SPAC Research. But 3 Asia Vet Pursues Engagement Tactic ultimately, the opportunities promise to be more expansive than those already seen 4 Nishkama Gains Propel Asset Growth as the market has taken off. “The increased quantity of publicly traded companies, in large part due to the 4 Cantor Farms Out Cap-Intro Tasks current SPAC craze, will significantly expand our underlying managers’ inventory of potential investments, both long and short, for years to come,” Neil Waldman of PAR Alum Ready to Trade 8 See WAVE on Page 8 9 LATEST LAUNCHES Event-Driven Startup Launches Third Fund An event-driven firm that formed in the thick of the coronavirus crisis already has assembled its third fund. Catalur Capital disclosed in a Form D filing with theSEC on March 8 that its Cata- THE GRAPEVINE lur Special Opportunities Fund 2 had $15.7 million of assets. The vehicle’s formation follows the launches of Catalur Special Opportunities A startup led by former Millennium Man- Fund 1 with $12.5 million on Oct. 21 and Catalur Master Fund with $115 million agement portfolio manager Seth Turkel- on May 1. New York-based Catalur now has more than $200 million under manage- taub has added a managing director to ment, with its capital-raising progress so far marking an unusually active start. head investments in healthcare compa- Catalur invests across the , pursuing special situations involv- nies. Jason Gupta joined New York equity ing companies that require or benefit from engagement with management or other shop Concentric Capital Strategies this stakeholders. It specifically zeroes in on opportunities that, due to their complexity month from TCW, where he had worked or size, might be shunned by other managers. as a portfolio manager and earlier as a The Catalur Special Opportunities series is tailored to transactions that require senior analyst. He joined TCW in 2015. See STARTUP on Page 4 Gupta’s previous employers include Bennett Lawrence Management, Mar- Helicopter-Lease Shop Circles ESG Strategy wood Group, Sivik Global Healthcare and TimesSquare Capital. Gupta is at least The operator of a novel fund that buys and leases out helicopters is starting two the fifth employee hired by Turkeltaub new vehicles, including the first in the sector to adhere to environmental, social and since he formed Concentric in January. governance principles. Turkeltaub worked at Millennium from Thora Capital is aiming to raise about $100 million for that offering, Thora Capi- 2008 to 2020. tal Climate Impact Fund 1. At the same time, the Chicago firm is setting out to col- lect a few hundred million dollars for the follow-up to its debut fund, a 2019-vintage The exodus has begun atDeep Basin Cap- entity called Thora Capital Fund 1 that took in $85 million. ital, which began unwinding this month Oakpoint Advisors is serving as placement agent for the new funds. At the same amid what it called extreme market time, Thora is discussing the vehicles’ terms with while casting an eye volatility exacerbated by retail traders. toward holding their initial equity closes in the second or third quarter. Business-development and - The new funds would pay quarterly dividends after completing their investment relations executive Tara Garber left the periods. Like Fund 1, the vehicles will have overall lifespans of nine years. Stamford, Conn., energy-stock investor The ESG fund aims to produce a gross internal rate of return of 14%, versus 17% See GRAPEVINE on Back Page See HELICOPTER on Page 5 2 March 17, 2021 ALERT Coatue Alum Closing In on Launch Bayliss had a brief stint at . John Larre is Hongkou’s chief operating officer and chief Peter Zhou’s planned technology-focused hedge fund opera- financial officer. He arrived in November from technology tion, Hongkou Capital, is coming into clearer view. company Hedera Hashgraph, where he had been a senior vice Zhou, formerly a senior managing director at technology- president for finance since 2018. Larre earlier served as chief oriented for nearly 10 years, is closing in financial officer at bothFolger Hill Asset Management and on a launch date for his Hongkou Capital Master fund. That’s Karsch Capital. now expected to happen within the next few months. In Zhou worked at Coatue — one of the hedge fund industry’s November, Business Insider reported that Zhou had $300 mil- premier technology investors — from 2010 to January 2020. He lion of commitments. That sum could be larger now given the earlier was a analyst at Blackstone. portfolio manager’s background and the continued strength of At yearend 2019, Coatue was running $19.2 billion in hedge technology . funds, vehicles and hybrid investment struc- While the New York firm will invest primarily in the shares tures. The firm is led byPhilippe Laffont.  of technology, media and telecommunications companies, it also will use a technology-informed view to deploy capital in the con- Ibex Betting on Autonomous Cars sumer, healthcare, automotive, industrial and financial sectors. In addition to fundamental long and short positions in pub- Niche investment manager Ibex Investors is launching an lic stocks, Zhou will make private investments, with the hope offshore version of an equity fund that seeks to profit from the that those deals will help Hongkou learn how disruptive busi- development of driverless cars. nesses affect public markets. The Denver firm, which runs $860 million overall, expects The firm will run a concentrated portfolio, with five to 10 to begin trading the Cayman Islands-domiciled companion primary long positions representing 60% to 80% of the fund’s to its Mobility Revolution Strategy fund over the next few equity and 10 to 20 smaller long positions representing at least months. While the existing fund manages more than $50 mil- another 20%. Hongkou intends for its short positions to repre- lion for U.S. taxable investors, the new vehicle is designed to sent 20% to 50% of the fund’s equity in 10 to 20 primary shorts attract non-U.S. investors and non-taxable U.S. investors such and five to 20 smaller positions representing at least another as , endowments and foundations. 5% of the fund’s equity. Hongkou plans for its net exposure to Mobility Revolution Strategy gained about 55% in 2020, be in the range of 25% to 75%. bringing its annualized return to 11% since inception in August The firm has set varied fees that could leave some feeling 2017. The fund takes long positions in the stocks of companies pressured to contribute more and also to participate in a found- Ibex believes are poised to benefit from the autonomous-vehicle ers share class. Founders class limited partners who contrib- trend, including semiconductor manufacturers, telecommuni- ute an initial $25 million will pay a of at least cations service providers, sensor manufacturers and miners of 1.25% and 15% of profits. Founders share class investors who rare-earth minerals, which are used in electric vehicles. contribute as little as $1 million will pay 1.5% and 17.5%. Meanwhile, the firm makes short bets against companies it Investors who opt against buying into that class and who suspects will suffer from the trend. Those include car dealers contribute at least $25 million will pay a 1.5% management fee and makers of parts for traditional gas-powered vehicles. and 17.5% of profits. In yet another variation, investors who Beyond its driverless-vehicle strategy, Ibex invests in the park at least $5 million but less than $25 million with Hongkou shares of companies that have market capitalizations of $250 will be charged 1.75% and 20%. million or less, a group it says has been overlooked by other In all cases, limited partners won’t be able to withdraw their managers and that contains hidden gems. The firm also capital for at least a year. employs a behavioral science strategy that aims to profit from Like increasing numbers of startups and existing hedge “emotions of the market,” according to a March 30, 2020, filing fund managers, Hongkou is planning to outsource almost all with the SEC. of its trading. Additionally, Ibex invests in public and private companies in So far, Zhou has just two others known to be working with Israel, which the firm says has the highest concentration of start- him. In January, he brought on Molly Bayliss as a senior analyst. ups outside Silicon Valley. In November, Ibex raised $100 million She previously worked as an analyst at Alan Fournier’s Pennant for a venture capital fund focused exclusively on the country. Capital, which Fournier converted to a in 2018 Chief investment officerJustin Borus founded Ibex in 2003, after 20 years in business. Before joining Pennant in 2016, initially as a venture capital operation. Borus earlier worked in the private equity and groups at . Planning Your Travel Schedule? Leading the Ibex Driverless Fund is Ryan Mahon, who joined Check out the most comprehensive listing of upcoming hedge the firm in July 2019. Before that, Mahon worked atMillennium fund conferences around the world. Go to GreenStreet.com and Management as an associate portfolio manager for about a year click on “Events & Conference Calendar” under Insights. and a half. He earlier worked as an analyst at Folger Hill Asset Management, Barclays and RBS.  3 March 17, 2021 Hedge Fund ALERT EJF Opens SPAC Fund to LPs “Rather than making fundamental business judgements, this strategy makes capital markets judgements and typically A fund that EJF Capital launched in November to meet exits prior to a business combination,” the firm wrote. “We limited-partner demand for exposure to the surging special- believe that the SPAC Fund has the potential to provide attrac- purpose acquisition company asset class is now open to outside tive risk-adjusted returns when compared to other strategies.” investors. EJF, which already participated in IPOs and has invested in The Arlington, Va., debt-fund manager formed the EJF SPACs since mid-2020, said its strategy offers “debt-like” down- SPAC Investments Fund after many of its investors asked for side protection with “equity-like upside potential.” Most of the a dedicated SPAC vehicle. Late last month, EJF made the fund fund’s positions will be backed by the value of underlying SPAC available to new and existing limited partners. trusts that hold short-term U.S. Treasury securities, the firm Designed to serve as a bridge between public and private noted. equity, SPACs are corporate shells that raise capital for later use After a three-month lockup, the SPAC fund offers monthly to acquire a target that is still undetermined at the time of a liquidity to investors with 30 days’ notice. public listing. Initially started decades ago as a more flexible Co-chief executives Emanuel Friedman and Neal Wilson alternative to traditional initial public offerings, SPACs have founded EJF in 2005. Friedman leads the firm’s SPAC team enjoyed a renaissance the past few years as firms invest in such with Akshay Dave, who arrived in 2015 from . EJF was industries as electric or self-driving vehicles, healthcare and managing $5.9 billion at yearend.  space exploration (see article on Page 1). Other firms prominent in the space are BlueCrest Capital, Asia Vet Pursues Engagement Tactic Davidson Kempner Capital, Fir Tree Partners, Highbridge Capital and Soros Fund Management. Another manager is starting a fund that would invest in Jap- SPAC shares fell recently amid market concerns over bloated anese companies while engaging with management to improve valuations, with a 24% decline in the SPAC-tracker Defiance their businesses. Next Gen SPAC Derived ETF from Feb. 15 to March 7. One Working through his Solaris Management in Tokyo, Hiroaki of the triggers cited in the selloff was a tempered view of the Toya is aiming for this month to launch a Cayman Islands- once-highly anticipated purchase by special-purpose acquisi- domiciled vehicle called Solaris ESG Master Fund. As its name tion company Churchill Capital Corp 4 of electric vehicle maker suggests, the entity would incorporate environmental, social Lucid Motors, whose production timetable was delayed. and governance criteria into its investment practices. In addition, research from data provider S3 Partners showed Toya has more than 20 years of experience in investments that bearish bets against SPACs more than tripled to $2.7 bil- and , with a track record that spans lion from $724 million at the start of the year, The Wall Street asset classes including stocks, private equity, lending, REITs Journal reported. and credit-default swaps. However, while some SPAC vehicles focus on acquiring In September 2018, he was named chief investment offi- emerging growth companies with the expectation that stocks cer of Japan Investment Corp., a public-private partnership will rise, EJF told prospective investors in an email last week that aims to support innovation and growth among Japanese that its fund intends to “exit these positions and take profits companies. But he and eight other executives resigned that upon an acquisition announcement or shortly thereafter.” December over concerns about compensation and control over investment decisions. Toya is better known as a former managing director who ran the Tokyo branch of Hong Kong-based multi-strategy firm LIM Advisors, where he worked from 2004 to 2018. He earlier Decision-Makers worked at private equity firmOlympus Capital Holdings Asia Scour This Space and . Aggressive activist strategies have long been out of favor in Japan, but attitudes have warmed toward friendly engagement Do you sell products or services to the alternative- tactics in recent years. investment community? Data company Insightia tracked 66 public activist campaigns in Japan in 2020, compared with 17 in China and Hong Kong. Take dead aim at your target market by advertising in And Japan had a record 75 activist campaigns in 2019 — up Hedge Fund Alert, which is devoured each week by from 52 the year before — trailing only the U.S. and Australia. decision-makers in the business. Solaris joins a fund-formation pipeline that includes Kikaku Management, a Hong Kong operation that also aims to engage For more information, contact Kait Hardiman at with the boards of companies in Japan. The firm, set to launch 201-234-3999 or [email protected]. this month, is led by former Elliott Management portfolio man- ager Hidemoto Kawai.  4 March 17, 2021 Hedge Fund ALERT Nishkama Gains Propel Asset Growth unique investor base,” said Jon Yalmokas, head of Cantor’s prime- brokerage group. On the heels of strong 2020 performance, equity manager For Layton Road, Cantor replaces the Gladstone, N.J., firm’s Nishkama Capital is on the verge of securing a $100 million com- first and only cap-intro client, BNP Paribas. That shift reflects the mitment from an . Paris ’s 2019 purchase of ’s prime-brokerage The Rhinebeck, N.Y. firm, led by formerKarsch Capital execu- division, which came with its own cap-intro unit. tive Ravee Mehta, is in late-stage talks with the California-based With BNP having absorbed Deutsche’s clients and staff, and its investor, whose allocation would apply to the Nishkama Capital contract with Layton Road expiring this month, the bank opted Fund. The mandate would follow a $50 million investment made not to renew. by a different institutional investor in October 2020. Layton Road was founded in 2018 by Tom Mahala, the former The new commitment would bring Nishkama’s assets to head of BNP’s cap-intro group. The firm also offers placement- about $450 million in the flagship fund and in a sizable separate agent services, with a client base consisting of about 15 hedge account, up from $250 million in February 2019. Meanwhile, the fund and private equity firms. Many are in niche areas including firm is telling prospective limited partners it wants to cap assets at cryptocurrency investing, environmental, social and governance $500 million for now. strategies and litigation finance. Nishkama Capital Fund posted a 29.2% gain in 2020, fueled Layton Road’s private-placement business additionally hosts by a 30% surge in the final three months of the year. By contrast, virtual conferences on digital-asset investing. It plans to hold its the S&P 500 Total Return Index gained 18.4% in 2020, including next such event in the coming months. a 12.1% increase in the fourth quarter. The HFRI Fund Weighted Cantor’s prime-brokerage group caters mainly to small and Composite Index climbed 11.8% last year and 10.9% in the fourth mid-size hedge fund operators, working with more than 250 quarter. management firms overall. It ranked 21st inHedge Fund Alert’s Nishkama invests in the stocks of technology, media and tele- first-quarter 2020 prime-broker league table with 57 clients large communications companies. Its approach combines fundamental enough to be registered with the SEC. research with behavioral science. In addition, the fund maintains Cantor is best known as a fixed-income dealer but has been a balance of value and growth stocks on the long and short sides building an equity division whose clients include long/short — a strategy that came in handy in February, when investor sen- hedge fund managers.  timent shifted abruptly from growth to value. The vehicle was up 13.4% this year through February. Startup ... From Page 1 In most cases, Nishkama avoids positions crowded by other hedge funds. It also uses limited . The firm charges a 1.5% more flexible capital, including private credit investments. management fee and a 20% profit cut but has the flexibility to At the time of its launch, Catalur told investors that among so- offer discounts to large investors. called stressed debt products with yields of 10% or more, it saw Mehta, who founded Nishkama in 2013, has more than 20 $270 billion of opportunities involving companies with total debt years of experience investing in the TMT sector. He ran his own and equity of more than $1 billion apiece. Among them were $120 money for three years before forming the firm. Earlier, Mehta was billion of possible plays tied to businesses whose capital structures a managing director at now-shuttered Karsch and an analyst at include at least five debt instruments. Soros Fund Management.  The firm also said it saw $153 billion of stressed debt involv- ing companies with total debt and equity of less than $1 billion, Cantor Farms Out Cap-Intro Tasks including those in the healthcare, industrial, oil-and-gas and technology sectors. Cantor Fitzgerald is outsourcing most of its capital-introduc- Catalur additionally invests in communications, consumer- tion functions to Layton Road Group. discretionary and transportation businesses. The arrangement became effective this month, with Cantor Among the 13 primary strategy categories tracked by eVest- paying Layton Road an undisclosed fee to facilitate meetings ment, distressed-debt vehicles delivered an average gain of 6.2% between the hedge funds that use the bank’s prime-brokerage from Jan. 1 to Feb. 28. The only sectors that fared better were services and prospective investors. origination and financing, up 8.5%, and event driven/activist, up For Cantor, the setup is less costly than building and maintain- 6.7%. ing an in-house cap-intro team. It also frees the firm from having Catalur is led by chief investment officer David Tiomkin and to replicate services Layton Road already offers in a ready-made partner Sergei Filipov. package. Tiomkin had been a co-portfolio manager at Aurelius Capital, To that end, Cantor sees Layton Road as bolstering the work where he started in 2008. During that time, he founded and built of two cap-intro staffers who remain on board in New York. The the firm’s office. bank lost some staff last year, including cap-intro headEmma Filipov most recently was a principal at MHR Fund Manage- Sugarman, who left in July to join fund operatorArgos Global. ment from 2013 to 2018 and before that was at Silver Point Capi- “Capital raising is increasingly more complex. We believe this tal. Earlier, Tiomkin and Filipov worked together on a proprietary relationship with Layton Road will give our clients access to a trading desk at that dealt in distressed assets.  5 March 17, 2021 Hedge Fund ALERT

more profitable than comparable activities involving commer- Helicopter ... From Page 1 cial fixed-wing aircraft, where it pegs expected gross returns for the new entry in Thora’s main series. That differential at 8%. reflects the fact that the helicopters deployed by the firm’s That’s in part because jets are more expensive, with shorter non-ESG portfolio tend to be more robust and therefore more lives, greater depreciation and higher loan-to-value ratios. expensive. What’s more, competition in that area is stronger. Users in that area include law-enforcement bodies, medevac Indeed, while aircraft leases sometimes are part of debt fund operators, utility companies and offshore oil drillers. On the portfolios, Thora maintains that it is the only manager with ESG side, where lessees often have less money, users include helicopter leasing as a stand-alone fund strategy. The firm buys a mix of public- and private-sector organizations engaged in new and used helicopters and services its own leases, eventu- activities such as wind-farm support, wildfire suppression, ally selling the assets or re-leasing them upon expiration of the environmental protection, agricultural support and humani- original users’ contracts. tarian aid. The ESG fund, meanwhile, marries two hot areas of the Thora additionally plans to offer co-investment opportuni- investment world: socially beneficial activity and niche debt. ties. Thora is led by chief executive Matthew Rothschild, who pre- Thora Capital Fund 1 so far is generating a net internal rate viously was a portfolio manager covering the equities of alter- of return of 14%, with $45 million invested in 32 helicopters native asset managers and companies at Balyasny that it leases to clients in the U.S. and elsewhere. For the new Asset Management from 2017 to 2018. Rothschild earlier was a funds, Thora’s marketing materials claim a deal pipeline con- portfolio manager at Alyeska Investment and headed research sisting of 28 transactions for 93 helicopters. The firm has told for U.S. financial-company stocks atAllianceBernstein. investors those would take up $250 million of equity and would Working with Rothschild as a managing director is Russell produce more than $1 billion of value. Christopher, who previously headed deal origination at air- Part of Thora’s argument for its investment products is that craft-leasing company RPK Capital. He was there from 2011 to helicopter leases have low correlation to other asset classes, are 2018. Thora’s chairman is Adam Gerchen, a onetime Alyeska not directly affected by economic downturns and are backed by portfolio manager who has been involved in a several niche durable assets. The firm also characterizes helicopter leasing as businesses.  6 March 17, 2021 Hedge Fund ALERT

PENSION PLAN CONSULTANTS Firms Advising Institutional Clients on Hedge Fund Investments

Company Contact The Skinny Aksia Matt Mullarkey Specialist research and portfolio advisory firm Aksia and its subsidiaries advise on New York 212-710-5710 more than $240 billion of client alternative allocations. Employs more than 300 [email protected] professionals, including 154 on investment research, operational due-diligence and risk-management teams. In addition to New York headquarters, has offices in Athens, Chicago, Hong Kong, London, San Diego and Tokyo. Albourne Partners David Harmston Albourne, with 307 analysts covering 4,000 hedge funds, boasts 300 clients London 203-299-4400 worldwide, up from 280 clients last year. Advises on $550 billion of alternative [email protected] investments. U.S. clients have included Cargill’s and University of California Regents. David Harmston is client service head for U.S. unit, Albourne America. Asset Consulting Tom Janisch Advises on more than $130 billion of traditional and alternative investments held Group 314-862-4848 by more than 150 clients, including endowments, family offices, insurance St. Louis [email protected] companies, public and corporate pensions and wealthy individuals. Founded in 1989, firm employs 47 people. Callan Jim McKee Has about 410 fund-sponsor clients representing $2.9 trillion. Led by Pete San Francisco 415-974-5060 Keliuotis, the firm’s hedge fund research team provides non-discretionary [email protected] consulting services covering asset allocation, investment policy, manager search and portfolio evaluation. Advises on fund-of-fund and multi-strategy hedge fund allocations totaling about $6.4 billion. It also serves as the general consultant to clients with an additional $11.4 billion in hedge funds. Those clients are sub- advised by other consultants. Cambridge Deirdre Nectow Handles non-discretionary and outsourced chief investment officer mandates for Associates 617-457-7500 more than 545 endowments, pensions and private clients with about $70 billion Boston [email protected] invested in hedge funds at yearend 2020. Total employees increased from 1,294 to 1,330 in 2020, with the number of senior investment employees also increasing from 280 in 2019 to 288 in 2020. Cliffwater Stephen Nesbitt Advises institutional investors on hedge funds and other alternative investments. Marina del Rey, Calif. 310-448-5000 Has $73.9 billion of assets under advisory and about $1.9 billion of discretionary [email protected] assets. Prefers direct investments in single-manager funds, rather than funds of funds, including event-driven, global-macro, long/short equity and multi-strategy vehicles. Ellwood Associates David Ramsour Founded in 1977, employee-owned firm works with about 190 endowments, Chicago 312-782-5432 family offices, foundations, healthcare systems and retirement plans, most with [email protected] assets of $1 million to $10 billion. Chief executive Russell Hill retired in February 2019 but remains chairman. Fund Evaluation Kevin Conroy Had 125 employees and $71 billion of assets under advisement at yearend 2019. Group 513-977-4400 Also runs two funds of funds, FEG Absolute Access Fund and Directional Access Cincinnati [email protected] Fund. Works with endowments, foundations, insurers and pensions, with some allocating more than 40% to alternative investments. Firm also has offices in Dallas and Indianapolis. Recommended volatility manager Malachite Capital to clients, including University of Toledo Foundation and University of Illinois. The $600 million firm unwound in March 2020 after it and a few other volatility managers were caught off guard by that month’s pandemic-related upheaval. Gallagher Fiduciary Michael Johnson Investment and consulting practice of publicly traded Arthur J. Gallagher & Co. Washington 202-898-2270 offers discretionary and non-discretionary services covering a range of [email protected] investments. Acts as independent fiduciary for particular assets to cure ERISA conflicts of interest. Clients include endowments, foundations, healthcare institutions, nonprofits, public pensions and single- and multi-employer retirement funds. Investment-consulting client assets totaled $59.4 billion as of Dec. 31, 2019, not including $5.25 billion of discretionary assets. See CONSULTANTS on Page 7 7 March 17, 2021 Hedge Fund ALERT

PENSION PLAN CONSULTANTS

Continued From Page 6 Company Contact The Skinny LCG Associates Adam Laubacker Advises corporations, endowments, family offices, foundations, nonprofits, Atlanta 770-644-0100 utilities and other institutional investors on $91 billion of assets. Also oversees [email protected] $951 million via outsourced chief investment officer services. Founded in 1973, employee-owned firm has staff of 53. Has additional offices in Dallas and Seattle. Meketa Investment Brian Dana Full-service investment consulting and advisory firm advises on $1.5 trillion of Westwood, Mass. 781-471-3500 discretionary and non-discretionary mandates for 200-plus institutional [email protected] investors. Clients have $30 billion allocated to hedge fund and liquid alternative strategies. Has a staff of 210, with 140 investment professionals, in six U.S. offices and in London. Employee-owned firm added 14 new principal equity owners in January 2021, bumping up ownership group to 72. That same month, hired Amy Hsiang, formerly head of and alternative credit at RVK, as director of public markets. Merged with Pension Consulting Alliance in 2019. Mercer John Jackson Marsh & McLennan unit had $55 billion of institutional assets under advisory as of New York 314-258-6563 Jan. 31, 2021. It also was managing $7 billion on a discretionary basis. In [email protected] February, promoted Pat Tomlinson, who worked at Aon Hewitt until 2014, as president of U.S. and Canadian business. Mercer continues to expand. In March, reached deal to buy $740 million wealth advisor Epstein & White Financial. NEPC Dulari Pancholi On Feb. 1, hired former Mercer executive Troy Saharic as principal and director of Boston 617-374-1300 new business development. Saharic’s initial focus is on reviewing and enhancing [email protected] NEPC’s outsourced chief investment officer business. Firm has 391 clients with $1.1 trillion of assets. Also has $60 billion of alternative investments. Maintains an alternatives-focused research staff of more than 20. With the promotions of three staffers in January, firm had 46 partners and 20 principals. NEPC maintains eight offices in the U.S. Rocaton Investment John Hartman Independently run unit of Goldman Sachs, which acquired the firm in 2019. Norwalk, Conn. 203-621-1717 Goldman provides research and technology support. Rocaton advises large [email protected] institutional clients that collectively have more than $600 billion of assets. Caters to family offices, foundations, healthcare institutions, insurers and pensions. Segal Marco Alan Kosan As of Dec. 31, 2019, worked with nearly 750 institutional clients with combined New York 203-621-3620 advisory assets of more than $620 billion. Total includes $316 billion of non- [email protected] discretionary assignments, $11.9 billion managed on a discretionary basis and Benji Patzik some $300 billion run on behalf of financial intermediaries. Staff of 115 includes 312-612-8410 88 investment professionals. [email protected] Verus Margie Lane On Sept. 29, announced joint effort with eVestment to encourage the institutional Seattle 206-622-3700 asset-management industry to disclose more information about employee [email protected] diversity and about initiatives to enhance diversity and inclusion. As of Jan. 1, provided services to institutional clients with $535 billion of assets, including $4 billion of discretionary assets managed by the firm’s outsourced chief investment officer business. Willis Towers Ben Leach A plan to be acquired by insurance giant Aon for $30 billion hit a snag in March Watson 312-203-8299 over concerns by the European Union’s antitrust watchdog. Aon will have to make London [email protected] concessions in response to a list of objections by the European Commission Harriet Goulding before proceeding with the bid, reported. As of Nov. 18, London-based 44-797-182-3433 Wills Towers Watson advised on $2.3 trillion across asset classes, including $112 harriet.goulding billion in discretionary portfolios. Works with corporate pension plans, @willistowerswatson.com endowments, foundations, healthcare systems, insurers and sovereign wealth Sara Rejal funds. 44-207-170-2645 [email protected] Wilshire Jamie Gnall Founded in 1972, Wilshire advises on more than $1 trillion of assets and manages Santa Monica, Calif. 310-899-5415 $83 billion across the asset-class spectrum. Alternatives research, advisory and [email protected] portfolio implementation services include hedge fund strategies, liquid alternatives, risk premia products and private markets.

8 March 17, 2021 Hedge Fund ALERT PAR Alum Ready to Trade Wilshire 5000 and the S&P 500 Total Return Index. For the 10 years before that, the HFRI index was up an annualized 5.7% Former PAR Capital partner Michael Tucker expects to versus gains of 3.7% for the Wilshire and 2.6% for the S&P. launch a fund on April 1 with $75 million. A SPAC-induced reversal could take a few years to develop Tucker would run the vehicle through a Boston-based man- as the operations work their ways through the pipeline, even if agement firm called Orvieto Partners that he started in Janu- new IPOs stop. ary. A source described the operation as employing a generalist A SPAC is a corporate shell that initially raises private capi- long/short equity and debt strategy. tal and then sells shares publicly with the aim of purchasing Tucker was at PAR from 2008 to December 2020, managing a yet-to-be-identified company within two years. From Jan. 1, a concentrated book of long and short positions in the equity 2020, to March 12, 2021, some 500 SPACs raised $147.6 billion and debt of gambling, lodging and energy companies. He ear- through their IPOs, according to IPOX Indexes. lier was a portfolio manager at Andover Capital, betting on the That was up from 59 in 2019, which in turn represented equity and debt of leveraged companies. growth from prior years. Tucker began his career at Standish, Ayer & Wood, where But it will take time for the launches to translate to a cor- he was a trader, analyst and portfolio manager covering junk responding increase in the number of operating companies bonds. available to trade. By IPOX’s count, 400 SPACs had yet to iden- Orvieto’s formation followed the 2020 launch of Albemarle tify their acquisition targets as of March 12, with 112 having Management, a healthcare-stock shop led by former PAR exec- named their targets but not yet completing the purchases and utive Tyler Saeli.  just 41 having bought their underlying businesses. While some in the hedge fund sector are skeptical that even half of the SPACs now looking to find a deal and complete a Wave ... From Page 1 merger will be able to do so, IPOX’s data shows a very low rate of fund-of-funds operator Waldman Capital wrote in a letter to failed SPACs. Just eight SPACs have been forced to liquidate and limited partners last month. return their capital to investors since the beginning of 2015. In a nod to the potential for short investments, Waldman Among those that completed the deals, three did so this year. added that the number of SPAC launches is outpacing the uni- At least 200 more SPACs are known to be in the IPO pipeline. verse of high-quality sponsors and acquisition targets. “There are The drop in Wilshire components amid those launches two tiers of SPACs: serious ones and silly ones,” he wrote. “Distin- reflects the fact that the index operator doesn’t count SPACs guishing between the two will be critical for investment success.” until after they complete their acquisitions, are widely available The number of liquid stocks has been declining for years to trade and have met certain liquidity tests. The Russell 2000 as more companies have tapped into ample private funding Index also excludes pre-acquisition SPAC stocks. and as initial public offerings have become more difficult. The Even then, few SPACs go on to become large-cap businesses. total return version of the Wilshire 5000 Total Market Index, According to IPOX, the average IPO in the sector since 2020 has the most-cited benchmark of easily tradable U.S. equities, had raised about $300 million. The median market capitalization of 3,463 components at yearend. That marks a slight decrease a SPAC that has bought its underlying business is $1.2 billion. from a year earlier and is down by more than half from the That’s too small for many large hedge fund operators to con- index’s 1998 peak. sider, suggesting that future trading opportunities will occur Stock pickers cite that contraction as one key reason for mainly among small and mid-size managers. laggard returns among equity-focused hedge funds, with the But one equity manager said he sees the expansion as more reduction in potential trades contrasting with growth in over- broadly helpful in tracking areas of growth, including electric- all market capitalization. As represented by the Wilshire 5000, vehicle companies. “It’ll be much more meaningful and helpful for example, the U.S. has grown by more than six for analysts in hot sectors,” he said. times since July 1998 to some $41 trillion. There have been some larger SPACs, too. The biggest so far How badly has performance lagged? The HFRI Equity is a Pershing Square Capital vehicle called Pershing Square Hedge Total Index produced an annualized return of just 5.8% Tontine Holdings, whose July 2020 IPO raised $4 billion. That over the 10 years ended Feb. 28, versus a 13.4% rise for both the entity surely would be large enough for inclusion in the S&P 500 Index upon the completion of an acquisition. Eagle Equity’s Soaring Eagle Acquisition raised $1.8 billion for its IPO in February. And Churchill Capital raised $1.2 billion Got a Message for the Hedge Fund Community? the same month for its Churchill Capital 7. Your advertisement in Hedge Fund Alert will get the word out to There additionally are some short-term opportunities. The thousands of professionals who actively manage funds, invest IPOX SPAC Index, a non-tradable collection of 30 post-IPO SPACs in them and provide services to the alternative-investment that have yet to complete their acquisitions, is up 59.1% since it community. For more information, contact Kait Hardiman at started on July 30. That’s despite a 15.4% selloff since Feb. 17. 201-234-3999 or [email protected]. By comparison, the S&P 500 is up 23.5% since July 30 and 1.1% since Feb. 17.  9 March 17, 2021 Hedge Fund ALERT LATEST LAUNCHES LATEST LAUNCHES

Equity at Portfolio managers, Launch Fund Management company Strategy Service providers Launch (Mil.) Catalur Special Opportunities Fund 2 David Tiomkin Event-driven March $16 Domicile: U.S. Catalur Capital, (Opportunistic credit)  See Page 1 New York

Kikaku Master Fund Hidemoto Kawai Event-driven 1Q-21 Domicile: Cayman Islands Kikaku Management, (Japan activist) Hong Kong

Solaris ESG Master Fund Hiroaki Toya Event-driven 1Q-21 Domicile: Cayman Islands Solaris Management, (Japan activist)  See Page 3 Tokyo

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THE GRAPEVINE credit-product investments, it runs real Sachs trader Benjamin Arnold launched estate and private equity strategies. the firm in 2019. ... From Page 1 Verition Fund Management has brought Former Jefferies vice president David in February. She’s now a director with on three internal recruiters. Vice Katona has joined Petrichor Healthcare similar responsibilities at New York- presidents Russel Woodhouse, previ- Capital as head of business development based Casdin Capital, which invests in ously of Prelude Capital, and Harry Case, and investor relations. Katona arrived the shares of healthcare, biotechnology, formerly of Lawbrook Partners, arrived at the New York firm this month. He’d industrial and technology companies. in February to identify candidates for been at Jefferies since 2015, serving Garber arrived at Deep Basin in 2017 Verition’s investment team. Associate as a capital-introduction specialist in after nine years atJ.P. Morgan, where Brynn Bannister, formerly of Jefferies, the prime-brokerage unit. He previ- she last worked on the capital-intro- joined this month to find talent on the ously headed business development at duction team. Casdin, founded in 2011 non-investment side. Woodhouse and Abundance Partners and Spruce Point by Eli Casdin, manages $3 billion across Bannister are in New York, while Case is Capital. Petrichor invests in the debt public and private investments. Deep in London. Verition, based in Greenwich, and equity of public and private health- Basin managed $1.8 billion of gross Conn., manages $3.5 billion, up from $1 care companies globally. It raised $410 assets at yearend 2019. At the time, it billion last March. Its multi-strategy fund million for its first fund last year. had 14 employees. gained 35% during that stretch. Event-driven manager Astaris Capital Chad Buresh has signed on as chief Outsourced-trading shop Meraki Global has a new head of marketing and inves- financial officer for credit-product Advisors has hired Simon Kelt to head tor relations. James O’Connell joined investments at H.I.G. Capital. Buresh its expanding business in Asia. Kelt, the London operation this month from arrived at the Miami fund manager who is stationed in Hong Kong, arrived Melqart Asset Management, where in January from Pimco, where he from HSBC, where he traded equities he held the same position from 2015 had been a senior vice president and derivatives since 2016. He earlier to December 2020. His resume also for alternative fund finance since traded the shares of companies in includes stops at Armajaro Asset Man- 2012. He also had two stretches at Europe for Libertas Capital. Kelt began agement, Tisbury Capital and Deutsche PricewaterhouseCoopers and spent time his career at J.P. Morgan. Meraki, based Bank. Astaris, led by Martin Beck, at JER Partners. H.I.G. has $43 billion in Park City, Utah, executes trades invests in stocks and credit products under management. In addition to across asset classes. Former Goldman across Europe.

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