so hard for the money
Been dying to get into Club SAC Capital but were uncomfortable with the idea of parting with a sizable chunk of change for several years at a time? We come bearing exciting news. Our favorite Stamfordians are opening the fund June 1, with terms you might feel more comfortable getting behind. Here’s the deal: legacy fees (3 & 50), no side pocket for new investors, no fund level gate, 25% investor level gate, and, wait for it, quarterly liquidity with no lockup. Previously, admission to Club SAC came with a three-year initial hard lock, so I don’t think I have to tell you people, this is huge (even with the gate). But in case it didn’t penetrate, let me put it this way:
Quarterly. With. No. Lockup.
What else, what else. More capacity might be offered later in the year, which may or may not be an institutional class, most likely with a lower fee (probably 20%), maybe with a lockup. There is a possibility this will be with a pass through structure, which Steve-O has apparently been pushing for some time. Currently, the big boy takes an incentive fee at the fund level, and pays his cabal of (75ish) portfolio managers out of that, meaning he takes on the netting risk. If the fund loses money in a given year (like, for example: 2008), Stever has no incentive fee coming in and must pay the PMs who actually performed (the 2 of them…kidding! 3?) out of his own pocket. (And, actually, the pot of gold intended to go toward animals-in-formaldehyde is at risk even in up years, depending on the distribution of the returns.) So if the netting risk could be put on the investors, that’d be nice.
From the mailbag:
Andrew Madoff is in Houston at NAPE (North American Prospect Expo), a giant conference for oil & gas companies and lenders to network and put deals together, and he is raising money. He is making the rounds looking for financial backers to develop some oil & gas properties in texas and approached our booth (NY & Houston based private equity) and spoke with us for about 15 minutes about his opportunities. The expo has an older-texan crowd and no one seems to have recognized him.