Hedge Fund ALERT Coatue Alum Closing in on Launch Bayliss Had a Brief Stint at Barclays
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MARCH 17, 2021 SPAC Tidal Wave Lifts Return Expectations Hedge fund managers with stock-picking strategies see lasting opportunities to 6 PENSION 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 short 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 capital structure, 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 at Deep 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 investors while casting an eye volatility exacerbated by retail traders. toward holding their initial equity closes in the second or third quarter. Business-development and investor- 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 Hedge Fund ALERT Coatue Alum Closing In on Launch Bayliss had a brief stint at Barclays. 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 Coatue Management 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 private equity analyst at Blackstone. portfolio manager’s background and the continued strength of At yearend 2019, Coatue was running $19.2 billion in hedge technology stocks. funds, venture capital vehicles and hybrid investment struc- While the New York firm will invest primarily in the shares tures. The firm is led by Philippe 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 pensions, 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 management fee 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 family office 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 investment banking groups at Bear Stearns. 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.