Monday, June 27, 2005
Summit Partners New Big Funds
Summit closes $3.3B fund
by Kelly Holman Posted 03:22 EST, 24, Jun 2005
Boston private equity firm Summit Partners plans to announce Monday, June 27, that it has closed its new private equity and venture capital funds with total commitments of $3.3 billion.
Summit raised $3 billion for its Summit Partners Private Equity Fund VII fund and $300 million for Summit Partners Venture Capital Fund II. The new private equity fund will invest $25 million to $450 million of equity in its deals, while the venture vehicle will deploy $5 million to $25 million of equity.
"We have very supportive limited partners, and we were able to bring in some new limited partners as well," said Joseph Trustey, a managing partner at Summit Partners.
While the firm didn't disclose its investors, LPs in its past funds have included Abbot Capital Management LLC, Adams Street Partners LLC, the Alaska State Pension Investment Board, the California Public Employees' Retirement System, University of Chicago and the Connecticut Retirement Plans and Trust Funds, according to Dow Jones & Co.'s 2005 Directory of Alternative Investment Programs.
Trustey said that more than 85% of the capital for the new funds came from past investors.
He and fellow Summit managing partner Martin Mannion managed the fundraising efforts for Summit, which began a mere four months ago. Summit did not use an outside placement agent to market its new funds.
Kirkland & Ellis LLP partners Bruce Ettelson, John O'Neil and Ted Zook advised Summit on the new funds.
Summit's funds will invest in growing, profitable businesses in the technology, healthcare, business and financial services, consumer and industrial products sectors. Some investments will in Europe.
Besides Boston, Summit has offices in London and Palo Alto, Calif.
"Our strategy is to find companies that are backed by world-class management teams and basically leave them alone," Trustey said.
Trustey said the number of investment opportunities available for the new funds is enormous, but he also said many businesses are being sold in "auction scenarios at prices that are quite high."
While Summit sometimes participates in auctions, the 21-year-old firm has relied heavily on cold-calling companies and establishing relationships with management teams, according to Trustey.
Summit is also unusual in straddling the line between venture capital deals and leveraged buyouts. Many of its deals are growth capital investments in money-making business, with little or no leverage.
Summit also manages subordinated debt investment vehicles. In March 2004, Summit announced the close of its latest mezzanine fund, Summit Subordinated Debt Fund III LP, at $465 million.
by Kelly Holman Posted 03:22 EST, 24, Jun 2005
Boston private equity firm Summit Partners plans to announce Monday, June 27, that it has closed its new private equity and venture capital funds with total commitments of $3.3 billion.
Summit raised $3 billion for its Summit Partners Private Equity Fund VII fund and $300 million for Summit Partners Venture Capital Fund II. The new private equity fund will invest $25 million to $450 million of equity in its deals, while the venture vehicle will deploy $5 million to $25 million of equity.
"We have very supportive limited partners, and we were able to bring in some new limited partners as well," said Joseph Trustey, a managing partner at Summit Partners.
While the firm didn't disclose its investors, LPs in its past funds have included Abbot Capital Management LLC, Adams Street Partners LLC, the Alaska State Pension Investment Board, the California Public Employees' Retirement System, University of Chicago and the Connecticut Retirement Plans and Trust Funds, according to Dow Jones & Co.'s 2005 Directory of Alternative Investment Programs.
Trustey said that more than 85% of the capital for the new funds came from past investors.
He and fellow Summit managing partner Martin Mannion managed the fundraising efforts for Summit, which began a mere four months ago. Summit did not use an outside placement agent to market its new funds.
Kirkland & Ellis LLP partners Bruce Ettelson, John O'Neil and Ted Zook advised Summit on the new funds.
Summit's funds will invest in growing, profitable businesses in the technology, healthcare, business and financial services, consumer and industrial products sectors. Some investments will in Europe.
Besides Boston, Summit has offices in London and Palo Alto, Calif.
"Our strategy is to find companies that are backed by world-class management teams and basically leave them alone," Trustey said.
Trustey said the number of investment opportunities available for the new funds is enormous, but he also said many businesses are being sold in "auction scenarios at prices that are quite high."
While Summit sometimes participates in auctions, the 21-year-old firm has relied heavily on cold-calling companies and establishing relationships with management teams, according to Trustey.
Summit is also unusual in straddling the line between venture capital deals and leveraged buyouts. Many of its deals are growth capital investments in money-making business, with little or no leverage.
Summit also manages subordinated debt investment vehicles. In March 2004, Summit announced the close of its latest mezzanine fund, Summit Subordinated Debt Fund III LP, at $465 million.
Friday, June 24, 2005
Another Deal Putnam Lovell Could Have Done?
AP
JPMorgan to Buy Neovest Holdings
Thursday June 23, 9:11 am ET
JPMorgan Agrees to Buy Trading Technology Firm Neovest Holdings
NEW YORK (AP) -- JPMorgan Chase & Co. said Thursday that it agreed to acquire Neovest Holdings Inc. from a group of private investors led by CCP Equity Partners.
Financial terms were not disclosed.
Neovest, a provider of trading technology and direct market access, offers investors segregated support and allows clients to trade anonymously across asset classes. Under the agreement, Neovest will operate as a unit of JPMorgan and its employees will continue to work out of their offices in Atlanta, New York and Orem, Utah.
Neovest Chief Executive Bryce Byers will become managing director of the unit and report to Emily Portney, JPMorgan's managing director and chief operating officer of origination and distribution for the Americas.
Under the combination JPMorgan said it will offer a range of services from direct market access and algorithmic trading to traditional brokerage activities including research, corporate access and global distribution.
The transaction, which is subject to regulatory approval, is expected to close in the third quarter.
--------------------------------------------------------------------------------
JPMorgan to Buy Neovest Holdings
Thursday June 23, 9:11 am ET
JPMorgan Agrees to Buy Trading Technology Firm Neovest Holdings
NEW YORK (AP) -- JPMorgan Chase & Co. said Thursday that it agreed to acquire Neovest Holdings Inc. from a group of private investors led by CCP Equity Partners.
Financial terms were not disclosed.
Neovest, a provider of trading technology and direct market access, offers investors segregated support and allows clients to trade anonymously across asset classes. Under the agreement, Neovest will operate as a unit of JPMorgan and its employees will continue to work out of their offices in Atlanta, New York and Orem, Utah.
Neovest Chief Executive Bryce Byers will become managing director of the unit and report to Emily Portney, JPMorgan's managing director and chief operating officer of origination and distribution for the Americas.
Under the combination JPMorgan said it will offer a range of services from direct market access and algorithmic trading to traditional brokerage activities including research, corporate access and global distribution.
The transaction, which is subject to regulatory approval, is expected to close in the third quarter.
--------------------------------------------------------------------------------
Thursday, June 23, 2005
Get to Ken Styrcula - Met at Infovest 21 Conf - To Join Structured Pdts Org
Recap of Highlights of Chicago Panel on "Opportunities in New Exotic Financial Instruments - Closed-end Funds, Hedge Funds and Structured Products" on June 21
posted by premia on Wednesday 22 Jun 2005 22:26 BST (Albourne Village)
Chicago, IL June 22, 2005 - On June 21st ninety people gathered in Chicago to hear a panel discussion on the topic "Opportunities in New Exotic Financial Instruments - Closed-end Funds, Hedge Funds and Structured Products." This is a topic of growing interest in that individuals and portfolio managers recently have invested tens of billions of dollars in such instruments in order to boost their risk-adjusted returns or diversify their portfolios.
The panelists for the meeting were (1) Mr. Keith A. Styrcula, Chairman of the Structured Products Association, and VP, JPMorgan Chase Equity Derivatives; (2) Mr. John Larkin, Managing Director, HFR (Hedge Fund Research) Asset Management, and (3) Mr. Paul C. Williams, Managing Director. Nuveen Investments. The moderator for the evening was Mr. Matt Moran, VP, CBOE, and a member of the Chicago QWAFAFEW steering committee.
KEY TOPICS COVERED
Among the topics covered at the meeting were the following:
Many investors recently have explored opportunities in new financial instruments such as certain closed-end funds, hedge funds and structured products, which recently have attracted billions of dollars in new investments. Bullishness was expressed on the potential for future growth in these products. One of the factors that is driving this growth is the fact that many investors are dissatisfied with the recent performance and yield on “traditional” financial investments such as stocks (e.g., the DJIA, Russell 2000 and Nasdaq Composite indexes are all down this year) and traditional long-term fixed income instruments (e.g., the recent yield on 10-year Treasury notes has hovered around 4%).
There has been work on a certificate of deposit linked to a hedge fund index, with 7-year maturity, 100% principal protection, FDIC-insurance up to $100,000, investor suitability requirement, and an investment minimum: of $50,000 (or $25,000 for an RIA).
There also has been work done on a hedge fund index short share class.
The number of closed-end funds doing covered call writing is expected to rise from zero in June 2004, to 25 in July 2005. Such funds have raised more than $10 billion in the past year, and there is potential for much more growth in the future. Investors are looking for 8% to 10% yield with such funds (which can underperform when stocks do well).
The approximate market share breakdown of investors in closed-end funds is 95% individual investors and 5% institutional investors.
The Structured Products Association is working on fostering more innovation and best practices.
U.S. investors are accustomed to taking on investment risk and usually do not ask for the principal protection feature in structured products, whereas European investors and regulators often request the principal protection feature in structured products. Marketing efforts for structured products in Europe have been very successful.
In regard to tax efficiency of structured products in the U.S., upside products can be pretty tax-efficient, but products with downside principal protection can be tax-inefficient in the U.S. because of issues such as phantom income and OID. European products with downside principal protection can be tax efficient under European tax laws (all investors should check with tax counsel for tax advice).
BACKGROUND INFORMATION
The meeting was held at the Chicago Board Options Exchange. and was co-sponsored by Chicago QWAFAFEW (Quantitative Work Alliance for Applied Finance, Education & Wisdom) www.qwafafew.org and the Structured Products Association www.structuredproducts.org.
This was the 27th meeting of Chicago QWAFAFEW (Quantitative Work Alliance for Applied Finance, Education & Wisdom) www.qwafafew.org. Steering committee members of Chicago QWAFAFEW include Mr. Sanjay Arya, Morningstar, www.morningstar.com; Mr. David Barone, Turning Point Securities; Mr. Adam Cohen, Zacks Investment Research, Inc., www.zackspro.com; Dr. Barry Feldman, Prism Analytics, www.prismanalytics.com; Mr. Matthew Moran, Chicago Board Options Exchange, www.cboe.com; Mr. Ranga Nathan, InvestMatrix Inc.; Mr. David O'Brochta, UBS, www.ubs.com; Mr. Richard Seefeldt, BRI Partners LLC, and Ms. Hilary Till, Premia Capital Management, LLC, www.premiacap.com.
BIOGRAPHIES OF PANELISTS
Keith Styrcula, Chairman, Structured Products Association Keith Styrcula is the founder and chairman of the Structured Products AssociationTM and a senior marketer in JPMorgan's Structured Solutions group. His career started in 1991 when he joined CSFB's Legal Department from Fordham University School of Law to oversee legal, regulatory and compliance issues related to First Boston's derivatives effort. While practicing as a derivatives attorney, he was a member of the FIA Law & Compliance Executive Committee, the SIA Options and Derivatives committee and served on the Business Conduct Committee of the Philadelphia Stock Exchange. He moved to the business side of equity derivatives in February 1997, reporting to the head of equity derivatives at SBC Warburg (renamed UBS following the merger). At UBS, he created the first structured product linked to the Dow Jones Industrial Average (issued by IBM). He returned to CSFB in July 2000 to launch the structured products platform for the newly acquired DLJ Private Client Services group, which placed $1.2 billion in its first year. He founded the 1100-member Structured Products Association TM in August 2003. www.structuredproducts.org
Paul Williams, Managing Director, Nuveen Investments, LLC. Mr. Williams currently directs the firm's new product development efforts in connection with closed-end funds. Nuveen is the industry's leading sponsor and manager of closed-end exchange traded funds with total assets under management of $52 billion. Over the past five years, Nuveen has launched over 50 new funds, with assets (including leverage) totaling approximately $24 billion, comprising portfolios targeted to the municipal bond, preferred securities, convertibles, value equities, emerging market sovereign debt and REIT markets and equity based index option strategies. He has been closely associated with the development of Nuveen's asset management business since the late 80's. He conceived of the leveraged municipal bond fund and in recent years he has played a key role implementing the strategic diversification of Nuveen's closed end fund complex. Previously, he managed Nuveen's municipal research department, which supports the firm's municipal portfolio management operations. His earlier career was devoted principally to municipal investment banking, where he helped establish Nuveen as a leader in education and water utility finance, and in the application of innovative strategies using variable rate debt, advance refundings, and public facility contract obligations. He received his B.S. degree from the Wharton School at the University of Pennsylvania and completed the Advanced Management Program at the Harvard Business School. www.nuveen.com
John Larkin, Managing Director, HFR Asset Management With over 10 years of experience in the hedge fund and alternative investment area, Mr. John Larkin works at HFR Asset Management as Managing Director responsible for third party and intuitional sales. Prior, Mr. Larkin served as the Co-Head of Third Party Distribution for Citigroup Alternative Investments offering their first registered fund of hedge fund. Prior to that, Mr. Larkin was creator and Head of the Private Investment Group at Merrill Lynch providing product and servicing of alternative investments to institutions and UHNW families (<$100mm). He was the co-creator and a Director of the Merrill Lynch Special Investment Group, the first retail alternative investment unit for that firm. Mr. Larkin is a retired Navy pilot and received a BS in Mechanical Engineering from New Jersey Institute of Technology. HFR Asset Management is a registered investment advisor with approximately $4 Billion under management. As the industry leader in transparent hedge fund investing, HFR manages index, active, and custom funds of funds for a diverse institutional client base. HFR, Inc. launched the first and distributes the industry’s largest hedge fund database. Since introducing the first investable hedge fund index, HFR continues to be an innovator, being named 2004 Fund of Funds Leader of the Year by Institutional Investor News and Alternative Investment News. www.hfr.com
BIBLIOGRAPHY
“Buy writing Makes Comeback as Way to Hedge Risk.” Pensions & Investments. May 16, 2005.
“The [Interest-rate] 'Conundrum' Explained.” Wall Street Journal, June 21, 2005; Page A16.
“Long-Term Interest Rates Buck Conventional Wisdom.” Los Angeles Times June 10, 2005.
“Bond Investors Seek Yields In Closed-End Option Funds.” Dow Jones Newswires. May 2, 2005.
"An Array of Options - A Buy-write Strategy Can Add Some Octane to Portfolios When the Markets Lack Direction." Worth Magazine, April 2005, pp. 102 - 104.
“Maintaining Speed -- In a Sideways or Falling Market, Writing Covered Call Options Is One Way To Give Your Clients Some Traction.” Bloomberg Wealth Manager, February 2005.
“CBOE’s BXM Index Forms Basis for Structured Products.” Structured Products, January 2005, pg. 8.
Picture Caption:
Pictured (left to right) are Paul C. Williams, Managing Director, Nuveen Investments; Keith A. Styrcula, Chairman of the Structured Products Association, and VP, JPMorgan Chase Equity Derivatives; John Larkin, Managing Director, HFR (Hedge Fund Research) Asset Management; Walter Sall, Chairman and CEO, Gateway Investment Advisers; and Matt Moran, VP, CBOE, at the panel on “Opportunities in New Exotic Financial Instruments - Closed-end Funds, Hedge Funds and Structured Products” on June 21, 2005, at the CBOE.
# # #
posted by premia on Wednesday 22 Jun 2005 22:26 BST (Albourne Village)
Chicago, IL June 22, 2005 - On June 21st ninety people gathered in Chicago to hear a panel discussion on the topic "Opportunities in New Exotic Financial Instruments - Closed-end Funds, Hedge Funds and Structured Products." This is a topic of growing interest in that individuals and portfolio managers recently have invested tens of billions of dollars in such instruments in order to boost their risk-adjusted returns or diversify their portfolios.
The panelists for the meeting were (1) Mr. Keith A. Styrcula, Chairman of the Structured Products Association, and VP, JPMorgan Chase Equity Derivatives; (2) Mr. John Larkin, Managing Director, HFR (Hedge Fund Research) Asset Management, and (3) Mr. Paul C. Williams, Managing Director. Nuveen Investments. The moderator for the evening was Mr. Matt Moran, VP, CBOE, and a member of the Chicago QWAFAFEW steering committee.
KEY TOPICS COVERED
Among the topics covered at the meeting were the following:
Many investors recently have explored opportunities in new financial instruments such as certain closed-end funds, hedge funds and structured products, which recently have attracted billions of dollars in new investments. Bullishness was expressed on the potential for future growth in these products. One of the factors that is driving this growth is the fact that many investors are dissatisfied with the recent performance and yield on “traditional” financial investments such as stocks (e.g., the DJIA, Russell 2000 and Nasdaq Composite indexes are all down this year) and traditional long-term fixed income instruments (e.g., the recent yield on 10-year Treasury notes has hovered around 4%).
There has been work on a certificate of deposit linked to a hedge fund index, with 7-year maturity, 100% principal protection, FDIC-insurance up to $100,000, investor suitability requirement, and an investment minimum: of $50,000 (or $25,000 for an RIA).
There also has been work done on a hedge fund index short share class.
The number of closed-end funds doing covered call writing is expected to rise from zero in June 2004, to 25 in July 2005. Such funds have raised more than $10 billion in the past year, and there is potential for much more growth in the future. Investors are looking for 8% to 10% yield with such funds (which can underperform when stocks do well).
The approximate market share breakdown of investors in closed-end funds is 95% individual investors and 5% institutional investors.
The Structured Products Association is working on fostering more innovation and best practices.
U.S. investors are accustomed to taking on investment risk and usually do not ask for the principal protection feature in structured products, whereas European investors and regulators often request the principal protection feature in structured products. Marketing efforts for structured products in Europe have been very successful.
In regard to tax efficiency of structured products in the U.S., upside products can be pretty tax-efficient, but products with downside principal protection can be tax-inefficient in the U.S. because of issues such as phantom income and OID. European products with downside principal protection can be tax efficient under European tax laws (all investors should check with tax counsel for tax advice).
BACKGROUND INFORMATION
The meeting was held at the Chicago Board Options Exchange. and was co-sponsored by Chicago QWAFAFEW (Quantitative Work Alliance for Applied Finance, Education & Wisdom) www.qwafafew.org and the Structured Products Association www.structuredproducts.org.
This was the 27th meeting of Chicago QWAFAFEW (Quantitative Work Alliance for Applied Finance, Education & Wisdom) www.qwafafew.org. Steering committee members of Chicago QWAFAFEW include Mr. Sanjay Arya, Morningstar, www.morningstar.com; Mr. David Barone, Turning Point Securities; Mr. Adam Cohen, Zacks Investment Research, Inc., www.zackspro.com; Dr. Barry Feldman, Prism Analytics, www.prismanalytics.com; Mr. Matthew Moran, Chicago Board Options Exchange, www.cboe.com; Mr. Ranga Nathan, InvestMatrix Inc.; Mr. David O'Brochta, UBS, www.ubs.com; Mr. Richard Seefeldt, BRI Partners LLC, and Ms. Hilary Till, Premia Capital Management, LLC, www.premiacap.com.
BIOGRAPHIES OF PANELISTS
Keith Styrcula, Chairman, Structured Products Association Keith Styrcula is the founder and chairman of the Structured Products AssociationTM and a senior marketer in JPMorgan's Structured Solutions group. His career started in 1991 when he joined CSFB's Legal Department from Fordham University School of Law to oversee legal, regulatory and compliance issues related to First Boston's derivatives effort. While practicing as a derivatives attorney, he was a member of the FIA Law & Compliance Executive Committee, the SIA Options and Derivatives committee and served on the Business Conduct Committee of the Philadelphia Stock Exchange. He moved to the business side of equity derivatives in February 1997, reporting to the head of equity derivatives at SBC Warburg (renamed UBS following the merger). At UBS, he created the first structured product linked to the Dow Jones Industrial Average (issued by IBM). He returned to CSFB in July 2000 to launch the structured products platform for the newly acquired DLJ Private Client Services group, which placed $1.2 billion in its first year. He founded the 1100-member Structured Products Association TM in August 2003. www.structuredproducts.org
Paul Williams, Managing Director, Nuveen Investments, LLC. Mr. Williams currently directs the firm's new product development efforts in connection with closed-end funds. Nuveen is the industry's leading sponsor and manager of closed-end exchange traded funds with total assets under management of $52 billion. Over the past five years, Nuveen has launched over 50 new funds, with assets (including leverage) totaling approximately $24 billion, comprising portfolios targeted to the municipal bond, preferred securities, convertibles, value equities, emerging market sovereign debt and REIT markets and equity based index option strategies. He has been closely associated with the development of Nuveen's asset management business since the late 80's. He conceived of the leveraged municipal bond fund and in recent years he has played a key role implementing the strategic diversification of Nuveen's closed end fund complex. Previously, he managed Nuveen's municipal research department, which supports the firm's municipal portfolio management operations. His earlier career was devoted principally to municipal investment banking, where he helped establish Nuveen as a leader in education and water utility finance, and in the application of innovative strategies using variable rate debt, advance refundings, and public facility contract obligations. He received his B.S. degree from the Wharton School at the University of Pennsylvania and completed the Advanced Management Program at the Harvard Business School. www.nuveen.com
John Larkin, Managing Director, HFR Asset Management With over 10 years of experience in the hedge fund and alternative investment area, Mr. John Larkin works at HFR Asset Management as Managing Director responsible for third party and intuitional sales. Prior, Mr. Larkin served as the Co-Head of Third Party Distribution for Citigroup Alternative Investments offering their first registered fund of hedge fund. Prior to that, Mr. Larkin was creator and Head of the Private Investment Group at Merrill Lynch providing product and servicing of alternative investments to institutions and UHNW families (<$100mm). He was the co-creator and a Director of the Merrill Lynch Special Investment Group, the first retail alternative investment unit for that firm. Mr. Larkin is a retired Navy pilot and received a BS in Mechanical Engineering from New Jersey Institute of Technology. HFR Asset Management is a registered investment advisor with approximately $4 Billion under management. As the industry leader in transparent hedge fund investing, HFR manages index, active, and custom funds of funds for a diverse institutional client base. HFR, Inc. launched the first and distributes the industry’s largest hedge fund database. Since introducing the first investable hedge fund index, HFR continues to be an innovator, being named 2004 Fund of Funds Leader of the Year by Institutional Investor News and Alternative Investment News. www.hfr.com
BIBLIOGRAPHY
“Buy writing Makes Comeback as Way to Hedge Risk.” Pensions & Investments. May 16, 2005.
“The [Interest-rate] 'Conundrum' Explained.” Wall Street Journal, June 21, 2005; Page A16.
“Long-Term Interest Rates Buck Conventional Wisdom.” Los Angeles Times June 10, 2005.
“Bond Investors Seek Yields In Closed-End Option Funds.” Dow Jones Newswires. May 2, 2005.
"An Array of Options - A Buy-write Strategy Can Add Some Octane to Portfolios When the Markets Lack Direction." Worth Magazine, April 2005, pp. 102 - 104.
“Maintaining Speed -- In a Sideways or Falling Market, Writing Covered Call Options Is One Way To Give Your Clients Some Traction.” Bloomberg Wealth Manager, February 2005.
“CBOE’s BXM Index Forms Basis for Structured Products.” Structured Products, January 2005, pg. 8.
Picture Caption:
Pictured (left to right) are Paul C. Williams, Managing Director, Nuveen Investments; Keith A. Styrcula, Chairman of the Structured Products Association, and VP, JPMorgan Chase Equity Derivatives; John Larkin, Managing Director, HFR (Hedge Fund Research) Asset Management; Walter Sall, Chairman and CEO, Gateway Investment Advisers; and Matt Moran, VP, CBOE, at the panel on “Opportunities in New Exotic Financial Instruments - Closed-end Funds, Hedge Funds and Structured Products” on June 21, 2005, at the CBOE.
# # #
Tuesday, June 07, 2005
Ultimate Example of HF CEO/COO Non-CIO
Mack hedging his future
This time, ex-CSFB chief is looking to 'build' not 'fix'
By David Weidner, MarketWatch
Last Update: 10:44 AM ET June 3, 2005
NEW YORK (MarketWatch) -- "Mack the Knife" is cutting himself a new role: hedge-fund chieftain.
John Mack, formerly chief executive at Credit Suisse First Boston and a top executive at Morgan Stanley (MWD: news, chart, profile) , is joining Pequot Capital Management as chairman of the Westport, Conn.-based hedge fund.
Mack earned a reputation and his nickname as a cost cutter, but in an interview with MarketWatch he said he is eager to take a role building a business rather than fixing one.
He said Friday that he has no overwhelming desire to return to the helm of a bulge-bracket firm. Mack also suggested that working at Pequot is like working in the hottest part of an investment bank.
"The profitability at investment-banking firms has moved to the trading desk," Mack said. "A lot of people say that certain firms are nothing, really, but hedge funds."
At Pequot, Mack said, he will look for investing opportunities mostly overseas. Already, Mack has traveled with Pequot executives to China and Taiwan.
Pequot manages about $6.5 billion, invested mostly in the technology and health-care industries.
The relationship between Mack and Pequot's chief executive, Art Samberg, goes back to 1992, when Mack went to Samberg to manage some of his assets. Mack referred investors to Samberg and encouraged him in recent years to expand into debt and distressed assets.
Wall Street has seen a rush of bankers try their hands in the hedge-fund business in recent months. Last year, not an extremely bountiful one for the industry, investment banks paid bonuses in some cases to keep funds from picking off bankers.
Among those departing for the lucrative returns of high-flying funds are Sal Naro, global head of fixed income at UBS, who left to start his own, and Eric Mindich, a former Goldman Sachs (GS: news, chart, profile) trader who opened his own fund last November.
Mack left CSFB in early 2004 after three years at the top job when he unsuccessfully tried to convince the investment bank's parent, Credit Suisse, that the unit should be sold or merged with another firm.
Since his departure from CSFB, Mack has worked out of Pequot's New York offices. He said he's become "entwined" with the company.
Some had expected Mack to return to investment banking or head home to his native North Carolina and a lead role at Wachovia Corp. (WB: news, chart, profile) or Bank of America (BAC: news, chart, profile) .
"I've had a number of offers, and the majority of them were to fix things, not build things," Mack said. "But the combination of knowing Art, the people here and being involved without being involved -- there were a lot of things I could do, but what would I really enjoy? This was it."
Recently, Mack was involved with a group of investors headed by former New York Stock Exchange board member Ken Langone that was seeking support for an alternate bid for the NYSE after the announcement that the Big Board would join forces with Archipelago. See full story.
Mack met with NYSE Chief Executive John Thain to discuss the value of the exchange in its merger with Archipelago Holdings (AX: news, chart, profile) . "My involvement was more as a facilitator," Mack said. "I think John has talked to the member firms. I think they've been called and understand."
But, Mack said, there is a group of private equity investors that may still have an interest in acquiring the NYSE.
David Weidner covers Wall Street for MarketWatch.
This time, ex-CSFB chief is looking to 'build' not 'fix'
By David Weidner, MarketWatch
Last Update: 10:44 AM ET June 3, 2005
NEW YORK (MarketWatch) -- "Mack the Knife" is cutting himself a new role: hedge-fund chieftain.
John Mack, formerly chief executive at Credit Suisse First Boston and a top executive at Morgan Stanley (MWD: news, chart, profile) , is joining Pequot Capital Management as chairman of the Westport, Conn.-based hedge fund.
Mack earned a reputation and his nickname as a cost cutter, but in an interview with MarketWatch he said he is eager to take a role building a business rather than fixing one.
He said Friday that he has no overwhelming desire to return to the helm of a bulge-bracket firm. Mack also suggested that working at Pequot is like working in the hottest part of an investment bank.
"The profitability at investment-banking firms has moved to the trading desk," Mack said. "A lot of people say that certain firms are nothing, really, but hedge funds."
At Pequot, Mack said, he will look for investing opportunities mostly overseas. Already, Mack has traveled with Pequot executives to China and Taiwan.
Pequot manages about $6.5 billion, invested mostly in the technology and health-care industries.
The relationship between Mack and Pequot's chief executive, Art Samberg, goes back to 1992, when Mack went to Samberg to manage some of his assets. Mack referred investors to Samberg and encouraged him in recent years to expand into debt and distressed assets.
Wall Street has seen a rush of bankers try their hands in the hedge-fund business in recent months. Last year, not an extremely bountiful one for the industry, investment banks paid bonuses in some cases to keep funds from picking off bankers.
Among those departing for the lucrative returns of high-flying funds are Sal Naro, global head of fixed income at UBS, who left to start his own, and Eric Mindich, a former Goldman Sachs (GS: news, chart, profile) trader who opened his own fund last November.
Mack left CSFB in early 2004 after three years at the top job when he unsuccessfully tried to convince the investment bank's parent, Credit Suisse, that the unit should be sold or merged with another firm.
Since his departure from CSFB, Mack has worked out of Pequot's New York offices. He said he's become "entwined" with the company.
Some had expected Mack to return to investment banking or head home to his native North Carolina and a lead role at Wachovia Corp. (WB: news, chart, profile) or Bank of America (BAC: news, chart, profile) .
"I've had a number of offers, and the majority of them were to fix things, not build things," Mack said. "But the combination of knowing Art, the people here and being involved without being involved -- there were a lot of things I could do, but what would I really enjoy? This was it."
Recently, Mack was involved with a group of investors headed by former New York Stock Exchange board member Ken Langone that was seeking support for an alternate bid for the NYSE after the announcement that the Big Board would join forces with Archipelago. See full story.
Mack met with NYSE Chief Executive John Thain to discuss the value of the exchange in its merger with Archipelago Holdings (AX: news, chart, profile) . "My involvement was more as a facilitator," Mack said. "I think John has talked to the member firms. I think they've been called and understand."
But, Mack said, there is a group of private equity investors that may still have an interest in acquiring the NYSE.
David Weidner covers Wall Street for MarketWatch.
