Two former investment executives at JANA Partners, the $2.1 billion hedge fund firm best known for fighting alongside Carl Icahn and others in shareholder activist battles, are planning to launch their first fund at the beginning of the second quarter.
The new fund, Hylas Capital Partners, will be similar to the JANA Piranha and the JANA Partners funds, which Hylas founders Adam Scotch and August Roth both worked on. It will invest in event-driven opportunities in equities and will also look at special situations in credit.
Event-driven funds had a good run in 2009, returning 22.71%, according to the AR Event Driven Index. Both Scotch and Roth believe the opportunities will continue into 2010, and they are paying close attention to special situation equities with improving balance sheets.
For example, they are looking at companies that may start paying out dividends again after suspending payouts due to balance sheet or operational issues in 2008. One company the managers are heavily invested in is Macquarie Infrastructure Company. That firm owns, operates and invests in infrastructure businesses, which are traditionally owned by governments or private investors.
The new fund will be long biased and will focus on North American industries such as natural resources, industrials/manufacturing and telecommunications/media.
Scotch and Roth left JANA in early 2009. Scotch was an analyst and co-portfolio manager of JANA Piranha. Roth was an analyst and a member of the investment committee, and he worked primarily on the flagship JANA Partners fund. He was considered a generalist, though he mainly focused on energy, cyclicals, power and telecommunications. Hylas is based in New York.
--Katrina Dean Allen