Have fun! Activist Hedge Fund Pardus Halting Redemptions
Activist Hedge Fund Pardus Halting Redemptions
Last Update: 3/31/2008 3:52:32 PM
By Joseph Checkler
OF DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--New York-based activist hedge fund Pardus Capital
Management said it's halting investor redemptions, at a time where many of its
holdings are plummeting in value.
Pardus, which manages more than $2 billion, is currently seeking changes at
several companies whose stocks it holds, most notably Delta Air Lines Inc. (DAL)
and UAL Corp. (UAUA), the parent company of United Air Lines. Pardus has for
months been trying to get the two airlines to merge, and both investments have
been significant losers.
"The actions we have taken will allow us to protect the funds and their investors
from the external short-term pressure of the broader financial markets and focus
on realizing value on our portfolio companies for investors over an extended
period of time," Pardus said in a statement. The firm is run by Karim Samii.
A person close to Pardus, which holds large positions in the 10 or so companies
it invests in, said that while the fund will not be making any new investments
from its current funds, it would not immediately be selling out of everything,
either.
"For the portfolio companies themselves, this is good news because it reduces any
market anxiety that we might have to sell shares as we will be able to maintain
our investment horizons on our core positions and complete our strategies,"
Pardus said in the statement.
"They don't want to be forced to have to bail out," the person close to Pardus
said.
However, the person did say that over the next two years, Pardus would slowly
sell some of its positions to satisfy investor redemptions.
Some of that selling has started already: Pardus late last week sold more than 10
million shares of London-based travel company Thomas Cook Group PLC, which was
created last year via the merger of Thomas Cook AG and MyTravel Group PLC. Pardus
still holds more than 34.9 million shares of Thomas Cook, but that's down from
57.3 million shares as recently as January. During the fourth quarter, Pardus
sold all 12 million of its shares in another holding, struggling Ford Motor Co.
(F).
Other holdings in Pardus' concentrated portfolio include General Motors Corp.
(GM) and Virgin Media Inc. (VMED). Through its Pardus Europe Special
Opportunities Master Fund LP, Pardus owns 12 million shares - or more than $450
million worth - of French car parts-maker Valeo SA Ord, making it Pardus's top
holding. Valeo on Monday denied it was in talks to allow Indian company Hinduja
Group to take a controlling stake in the company.
-By Joseph Checkler, Dow Jones Newswires; 201-938-4297;
joseph.checkler@dowjones.com
(END) Dow Jones Newswires
March 31, 2008 15:52 ET (19:52 GMT) |
