So, what do you do when you manage to blow out your clients to the tune of 88% in a single year? Do you:
A. Confess your sins to your sons who promptly turn you into the FBI?
B. Plan a little spot of bother during your flight to Florida?
C. Close the shutters and open a brand spanking new fund with a brand spanking new name?
Of course, it’s a trick question. The answer is D. “Any of the above,” now that Michael Zimmerman has met that definition.
Michael Zimmerman, who runs New York- based Prentice Capital Management LP, plans to start a hedge fund focused on retail and consumer stocks after his main fund halted redemptions and lost as much as 88 percent last year, according to marketing documents and investors.
The new Prentice Capital Long/Short Equity Fund would buy and sell only publicly traded stocks, according to the marketing documents. The firm’s flagship fund, Prentice Capital Partners, trades public stocks and corporate debt and has about a third of its assets in closely held companies.
“How can you raise money when you’ve destroyed capital to that degree?” said Brad Balter, whose Boston-based Balter Capital Management LLC invests in hedge funds. Balter doesn’t invest with Zimmerman, 38, who traded retail and consumer stocks at Steven Cohen’s SAC Capital Advisors LP for five years before founding Prentice in 2005.
Who says there are no second acts in American lives? (I know, I know, but he didn’t know about hedge funds, that was the point, sheesh).
Zimmerman’s Prentice Plans New Fund After Losing 88% in 2008 [Bloomberg]
Shoulda stayed with the Big Guy
The Jeff Gendell school of money management.
too over, didn’t head
Can Muffie explain this to me?
Sincerely,
Family Office Guy
C)
It’s funny because that’s exactly what the fund I’m with is doing.
And a ton of others
Sigh, wish I coulda got in on this racket a couple years earlier to really milk it
-88% is the new “killin’ it! ”
If those guys had listened to me they be in cash producing machines like teddy bear companies, fitness outfits and movie rentals. Ya don’t listen; ya don’t make money!
I love the top picks! THIS is his best of list…
Gaiam Inc fell 84 percent.
Russ Berrie & Co. tumbled 82 percent Blockbuster Inc. dropped 68 percent.
If you invested with Mike and saw these holding, your only hope was that he WAS doing something illegitimate….
Hmm, thinly traded stocks with minimal analyst coverage… I bet these stocks rallied at least four times a year…
BTW, how is Holly doing ?
I am a trader at a hedge fund. What is a stop loss?
The probability of this guy Zimmerman, funded by his mentor Cohen, trading independently of Cohen is pretty close to 0; Cohen uses guys like Zimmerman, Sender, Ganek to evade regulators.
isn’t his wife Holly Becker?
@9- no shit.
@ 10 yes. remember the Ebay trades at SAC?
http://query.nytimes.com/gst/fullpage.html?res=950DE3D71F3AF937A15757C0A9659C8B63
@10 SEC’s Holly Becker Case Slowly Fades Away
http://www.thestreet.com/markets/matthewgoldstein/10125862.html
@2: you beat me to it.
So this genius was long retail going into a deep recession?
WTF sorta drugs did they feed this freak @ SAC that this seemed like a good idea, seriously, they must be INCREDIBLE!
“How can you raise money when you’ve destroyed capital to that degree?”
I believe the answer is “There is a sucker born every minute.”
Some very ignorant and native guests have posted here. According to the cited report, Cohen funded Zimmerman with $400MM at inception. Had Zimmerman been permitted to trade independently, Cohen–a known “control freak”–would’ve harassed this guy incessantly with the first losses. In other words, this Zimmerman was permitted by Cohen to lose that much only in Cohen’s interest (maybe Cohen had been short same stocks in main fund, who knows?).
@5 – And I saw it at my last shop; the “Look Ma No Track Record” school of marketing. Toss in a few hypothetical return charts, some fancy bullet points, and voila! It’s raining subscription forms!
Did they close their Aspen, CO office?
Bess you should call this guy “Mr. Bubbles” – because thats where he put investors cash.
http://findarticles.com/p/articles/mi_m0EIN/is_2007_Dec_17/ai_n21157563
You don’t lose 88% and start a new fund if you aren’t being cornholed by Stevie in a sidepocket.
How quickly can I give this guy my money? I want him to manager every penny I have, as he is obviously very good at what he does.
It’s easy to comment on a situation from the outside looking in, off of a 20 line blurb on a website you read. Michael did not have the foresight to see the stock market was going to crash, well that would not make him any different then 95% of hedge fund managers out there.
You don’t know if the situation was exacerbated by Cohen’s influence or not. And a lot of the losses came from Private Equity investments. Show me a private equity fund that did decently in 2008. Granted the level of the losses is an abomination, but to make comments on the guy and his abilities based upon 1 year is ridiculous. You all were not lauding him when he was surpassing others in returns. The guy deserves a chance to test the waters, get back to his long/short wheelhouse and try and outperform. If you don’t trust him, don’t give him your money, but you can’t fault a guy for having the pride to try and claw back toward success. If Brad Balter does not want to commit capital to the guy, don’t- he can keep his colorful comments to himself.
@23
What are you his assistant/wife/boyfriend?
Anyone who didn’t see this coming, hell, they had til mid-2008 to save their ass most likely, is an absolute retard.
@24
Actually I am none of those things, but I see how you could make that deduction.
And Sometimes things are unsavable. If you read the whole article on Bloomberg, you would see that he was running a different fund from April that generated positive returns.
Anyway, I don’t need to defend him, when he is up and running he will have the opportunity to generate returns and silence his critics.
@21:
You proposed another possible relationship between Cohen and his “proteges”: Cohen’s using these guys as a “side pocket” would be similar to Enron’s abjecting losing natgas trades into off balance sheet LPs.
what about 3rd time is a charm???? today’s WSJ has a piece on John Meriwether contemplating a third fund.. as you know he had little issues with LTCM in 1999 and with relative value opportunities in 2008. IS ANYONE THAT DUMB TO GIVE HIM MORE MONEY?
@23: Are you kidding me. If he made a private equity investment into Blockbuster or the teddy bear business, he is even dummber than I thought. MZ was the central focus of a Business Week article several months/years ago. Focus on thinly traded names and use your influence over the analysts that cover them. He used to use Jon D as his henchman.
Nice try, some of us are closer than you think…. ;-)
The guy who said “there are no second acts in American life” might win a few oscars this year for his 1921 short story
The SEC needs to take a serious look at Zimmerman. He escaped insider trading charges by the skin of his teeth (only because the SEC improperly disclosed the investigation to the press and was then too scared to move forward) and then proceeded to create losses within 12% of Madoff’s. Anyone who gives money to this guy needs to get their head examined.