We’ve been writing a lot about NYC Pocket Change’s upcoming speed dating event, for “rich old women and hot young men” i.e. the greatest spectator sport of all time (Thursday!) and although many of you are all for being made kept boys, there remain a few who are uncomfortable with the shift in gender dynamics. Obviously I’m talking about Pirate Capital manager Tom Hudson and obviously I’m referring to his profile on SugarDaddyForMe.com, which purports to be “The Real Sugar Daddy Website.” It was recently forwarded our way and though we like to be skeptical about this sort of stuff after having been burned by the fake James Simons listing on CollarMe.com, nothing about the profile seems so outlandish as to have been made up by one of Hudson’s many, many disgruntled former employees. The part about his income being “more than $1,000,000” seems to be a bit of an exaggeration, considering that his flagship fund is currently managing about five bucks, to say nothing of all the dinero he sunk into printing up those proxy battle t-shirts, but I’m sure everyone rounds up on these things. Anywho.
The 6’1, 42 year-old Caucasian is looking for a 25-32 year-old cupcake with a “sense of humor” and “a brain” (not sure if that’s slang for waxed nether regions, I’ve heard it is). You must live in New York or being willing to relocate. You also “must be white.” No brown sugar for this sugar daddy. “Refined” only, thank you very much.
You might wonder if we have a problem with the racist overtones contained in Tom’s profile. We don’t. If that’s his thing, well, that’s his thing. What we have a problem with is the fact that the existence of this listing is more or less proof that Hudson couldn’t make it work with Isa Bolotin, or sister Holly. And if the scions of soft rock can’t make it work with this guy, it’s probably a good indication that no one can (though Blarney will certainly try). And that’s a shame on par with Pirate seeing about five units* worth of redemptions, because he already built that huge mausoleum, and if the slot for “dead wife” goes unfilled, well, that’s just embarrassing.
Nevertheless, we’re not giving up hope yet. In fact, we encourage the young ladies to give him a call on his direct line (203-890-2000). Other pertinent info, after the jump.

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It’s common knowledge that Tom Hudson has pretty much run Pirate Capital into the ground, by allowing Michael Bolton’s daughters to construct all discounted cash flow models, structure all pair trades and calculate the firm’s daily alpha. You knew that, we knew that, the employees at the Local PetSmart, who work on commission and had come to expect a minimum buy/day of whatever a truckload of minnows costs from Hudson knew that. Fucking Michael Bolton knew that. The one person who didn’t know that, or wouldn’t admit it to investors (“We’re having a great year!” “Don’t buy the hype!” “I’ve got a great pick called SMD that’s going to make us all rich!” he wrote last month) was Tom Hudson. Brother was in serious denial and was getting hard to watch. No longer.

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In September 2006, Pirate Capital was managing $1.802 billion. Today? Less than $400 million. September 2006? Interns were given the special assignment to go down the road to buy minnows for bigger fish to devour to the leering delight of a staff busy not executing profitable trades. Today? Tom Hudson is forced to make his own trips to PetSmart. You could blame the changes in AUM and aquatic life responsibilities on simply a run of bad luck, or recent market turbulence, but the story we’re hearing (from, yes, a maybe unreliable source) sounds slightly more plausible, if you know how Tom Hudson feels about soft rock ballads.
Apparently Isa Bolotin isn’t the only offspring of Michael Bolton neé Bolotin working at Pirate (in the increasingly irrelevant role of director of investor relations). Bolton’s other daughter, Holly, is currently on payroll as personal assistant to Hudson, which, according to some people, carries the responsibility of making decisions regarding workforce cutbacks. Supposedly, the Pirate staff, which is now down to five, let go of three employees this week (without severance, natch) because Holly told big T to get rid of them, on suspicion that (and this is almost better than the Michael Bolton connection) they posted incriminating comments about her on a Wall Street tabloid. (To her credit, Holly only thought it was one of them, but all three were terminated to be sure all bases were covered.) If you believe that, then you’ll also believe the broader allegation from our source that Hudson “blindly does whatever the Bolotin girls tell him to do, and will be able to blame them when he’s forced to shutter the fund.” Pirate Capital would not confirm or deny any part of the story, because they would not permit us to ask any questions. Their phones are apparently programmed to hang up, after a hand is placed over the receiver and whispers are exchanged, when the word “dealbreaker” is mentioned. Twice.
Earlier: What The Seed Of Michael Bolton Hath (Possibly) Wrought

Tom Hudson’s Pirate Capital is kinda-sorta denying reports that it’s assets are down almost 80 percent in the past year. He describes the reports from “various media” as “grossly misleading.”
But are they? Pirate Capital’s assets are way, way down. Here’s Tom’s full statement:

Various media have published grossly misleading information regarding results at funds managed by Pirate Capital. Some reports have suggested that Pirate funds lost almost 80 percent of their value in the past year. In fact, while assets under management have decreased, average returns over Pirate’s four funds during the last year are about plus 4 percent.
Pirate Capital remains committed to its event-driven strategy to create value for its investors.

Two things. First: what the hell does that mean? As best we can tell, Tom means that Pirate’s assets have diminished due to investor redemptions rather than just losses in the funds.
Second: that “average returns” business is pretty dodgy. There are lots of ways to calculate an average and there’s no way to tell which method Tom is using here. The “average returns” over Pirate’s four funds only matter to investors who are in all four funds. If you’re in just one, it doesn’t really help that the average returns are sailing in calm seas. You’re already off to blackout island if you’re in one of the two activist funds. Goldman Sachs has positive average returns but that hardly helps investors in Global Alpha.

Pirate Capital Statement Regarding Funds [Biz Wire Press Release]

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.”