No one is getting off the Jolly Roger alive. Bloomberg is reporting that Tom Hudson’s Pirate Capital is shanghaiing investors, forcing them to remain on board its two Jolly Roger Activist funds by halting redemptions. The firm’s assets have declined by almost 80 percent in the past year, according to Bloomberg.
Pirate has said that the four stocks held by the funds are special investments—which, as best we can tell, means that Pirate isn’t willing to sell them immediately to meet redemption requests. The two funds, which are not even two years old, have declined from $150 million to $100 million since they were launched.
So what are the special investments?
“Hudson's letter didn't identify the four stocks held by the activist funds. Pirate's biggest holdings as of June 30 were armored carmaker Brink's Co.; auto-parts retailer Pep Boys-Manny, Moe & Jack; U.S. energy supplier Aquila Inc; and Angelica Corp., a provider of laundry and textile-rental services,” Bloomberg reports.
All is not lost for the Pirates however. They may not have much left in terms of assets. But they still have that special thing called “hope.” Bloomberg notes that while Pirate will continue to charge its 2 percent management fee, it “won’t collect its 20 percent cut of any profits until after until the positions are no longer deemed special investments.”
Posted by eyepatch , Sep 11, 2007 1:26PM
argh! i already told ya! it's my moony!
Posted by Chuck Ponzi , Sep 11, 2007 1:27PM
Aquila Inc. is special only in that Pirate read the situation incorrectly.
But upon reflection that is not special at all for Pirate of late.
Posted by , Sep 11, 2007 1:28PM
You guys should work on being much more concise. Cut down on the bloat.
Posted by rahodeb , Sep 11, 2007 1:37PM
i cant believe i even wasted hours of my life to interview with these losers
Posted by Mebane Faber , Sep 11, 2007 1:46PM
Didn't most of the team leave to start FrontFour? How are they doing?
Posted by ex , Sep 11, 2007 1:50PM
Tom is the nicest man.
Believes in family time - about 30 mins a month!
Respect for others is also high on the list - screaming is encourage and humiliation is quite a sport.
ex
Posted by Don't Jump! , Sep 11, 2007 2:17PM
Gotta love the high-water mark. Once you drop enough, all the good underlings flee because they won't get a bonus for a year or two. Fund founders, investors gets diminished capital back... so they can invest it in another fund and pay fees from day one -- maybe even to the departed underlings from the prior fund.
For capitalists, investors sure make some counter-productive demands on their managers.
Posted by Natural Gas Traders Hall of Fame , Sep 11, 2007 2:37PM
Aquila????
If you'll recall, before Aquila's tradestaff killed the trading side of the company..."put it to bed" they said in a letter to employees....they used to have a website.
On that website's link to their staff... or "Intellectual Capital"... as they called it, was a wall paper image of Albert Einstein for God's sake behind their brief bios. Oh shit how we laughed at that!
I think when that image went up, the entire industry couldn't short Aquila fast enough, the Greens included.
Posted by frontfour_fan , Sep 11, 2007 2:55PM
yeah the priate ship starting sinking when those hedgies left to start their own firm. i hear things are going gangbusters for Front four!
Posted by eric m , Sep 11, 2007 3:02PM
Frontfour is supposedly doing fine so far, in both AUM and returns. Tom is totally done, but is unlikely to give a shit.
Also, "Don't Jump," the analysts didn't leave because of a high water mark..... pirate was around break-even when they left, and was profitable most of the year. They left because when Pirate did 20% on $1bb, they received a bonus about 75% below market rate, if not more, and didn't want to get even more screwed over in a bad year. Or so i'm told.
Posted by ex , Sep 11, 2007 3:42PM
Tom has no bounds when greed is at hand
Posted by The Man with No Brain , Sep 11, 2007 4:01PM
Pirate Capital traders and financiers are the best in the world you fuckers and don't think you can change that or besmirch it. They're smarter than you and I...just ask them and you'll see !
Even though today I'm waiting (...and waiting, etc) on info regarding a slight "redemtion" that I need, I am sure that things are going....uh....huh? They aren't going to....? BASTARDS!!!!
Posted by DONE , Sep 11, 2007 5:07PM
He has four names deemed as special investments (BCO, PBY, ADG and AGL). He has board seats on three names and going for the forth (AGL). What a joke. It's a crime that this guy has the balls to charge investors a management fee for these crappy names with no exit strategies. He's DONE.
Pretty soon he will be homeless and wearing those Aquila t-shirts he donated to the homeless shelter in Norwalk. What a branding strategy, have a bunch of homeless people wearing your Pirate t-shirts. Desparate times calls for desparate measures.
Posted by Lawsuits Galore , Sep 11, 2007 5:13PM
Investors will sue to get their money back. They will not have a problem getting people to testify against Tom. Every single person that's left will gladly support the investors cases. Tom only has a unich to defend him. What a general counsel. A guy that has done nothing to address the hostile work environment and supported and covered up Tom's affairs in the office.
Posted by Done like fingercuffs , Sep 11, 2007 5:18PM
I cannot think of a shittier position to be in than be invested in four illiquid names, have my deputies desert me, not have a board seat on one name, and have the whole world watching my positions. I hope he doesn't have any of those in asset or return swaps; mark to market is a harsh mistress in these situations.
Posted by Fait Accompli , Sep 11, 2007 5:33PM
Yes, mark the market will be a mistress Tommy will have to take on, even with resident pole smokers (Isa Bolotin and Holly Bolotin) in tow.
Posted by KARMA , Sep 11, 2007 5:54PM
Yes, eric m is right. In 2005, Pirate delivered 19% net of fees to investors compared to 3% return on the S&P. Tommy dished out a measly 5% of his incentive fee to pay his team. He had the audacity to yell at the team for their "underperformance" because he was able to deliver 30-40% returns when he (Tommy) was the sole analyst and running $2mm. What sad narsicistic sociopath.
Posted by Piratez , Sep 11, 2007 5:56PM
Maybe he should go to Pirate Capitol (Provincetown) and raise some cash at Ye Olde Glory Hole? Sorta like the Fram man: you can chug cock now or you can chug it later.
In prison, he'll have to "Swab the Deck" hourly.
Posted by eric m , Sep 11, 2007 6:07PM
the one thing tom DID do for just about everybody who worked for him before the organization got out of control, was transfer to them a massive amount of investment common sense. Obviously the guy has struggled for a while now, but remember that even after all this BS he's still eeking out 20-25% annual returns since inception. That wasn't luck, and most of the former investment team will agree that the experience they had at pirate, excluding compensation, contributed significantly to their development, in most cases, into the talented investment professionals they currently are, and weren't to begin with. I am sure that part of Tom's justification for not paying his analysts what they deserved is that it was due primarily to his tutelage that they had become good enough to deserve that compensation to begin with. Just a hunch.
Posted by Tell All , Sep 11, 2007 6:07PM
Piratez, you hit the nail right on. Tommy definitely has gay tendencies as well. It's very apparent in how he mistreats women. Also on one Pep Boys due diligence trip, Tommy went with a male analyst to a Pep Boy store in CT pretending to be "gay" lovers while shopping for tires. It was f'in hilarious. You don't make sh*t up like that if you're straight.
Posted by ??? , Sep 11, 2007 6:12PM
eric m, what pole are you smoking now? Tommy might have done that for interns, but the analysts that came in working for him has more investment common sense than he did. Why else did they leave?
Posted by Former Eye-Patch Wearing Joker , Sep 11, 2007 7:17PM
Tom apparently has 0 friends. I love it....
Posted by Where is the logic? , Sep 11, 2007 9:51PM
Why will Pirate designate these four names (ADG, AGL, BCO and PBY) as special to limit redemptions in the Activists funds? The Activist funds make up less that $100mm in AUM. If he has $479mm in AUM as of June, why is Tom putting $379mm in AUM at risk to protect less than $100mm in AUM? That doesn't make any sense. Maybe the investors are ALL redeeming in the Jolly Roger funds.