Anchorage Capital Group

Last updated

Anchorage Capital Group, L.L.C
Type Private
Industry Investment management
Founded2003;20 years ago (2003)
Founders
  • Kevin Ulrich
  • Tony Davis
Headquarters610 Broadway, New York City, New York, U.S.
Products Alternative investments
Hedge funds
Distressed securities
Private credit
Venture capital
AUM US$32 billion (2022)
Number of employees
100 (2022)
Website www.anchoragecap.com
Footnotes /references
[1]

Anchorage Capital Group (or simply Anchorage) is an American investment management firm based in New York City. The firm is known as one of the world's most prominent vulture funds, funds that invest in distressed securities. [2] [3] [4] [5] [6]

Contents

Background

Anchorage was founded in 2003 by Kevin Ulrich and Tony Davis. [7] [8] Both of them were previously working in the distressed debt business of Goldman Sachs. [7] [8] The firm received $100 million in seed money from Reservoir Capital Group. [7] [8] Later on Davis, left the firm to start a new one named Inherent Group which focused on ESG investments. [9]

In December 2021, Anchorage announced it would close its $7.4 billion credit flagship fund (ACP Capital) due to lackluster returns and difficulties in markets such as distressed securities. [2] [3] [4] The firm would move on to focus more on investments related to structured finance like collateralized loan obligations as well as private credit. [2] [3] [4] [10]

At the same time, co-founder Ulrich also announced he would be stepping down from his role as CEO to move to a new role as chairman. [2] [3] One of the potential factors that led to this apart from the firm's recent performance was the fact that in 2019, Ulrich was sued by a woman accusing him of sexual assault in a Manhattan hotel. [2] [11] The complaint was withdrawn later after Ulrich settled with the accuser, but the firm's clients were displeased by the firm's failure to disclose the allegations after they appeared on public record. [2] [11] [12] Anchorage is headquartered in New York City and has an additional office in London. [13]

Although Anchorage mainly invests in distressed securities of companies such as Eir [14] [15] and New Look, [16] in recent years it has been involved in funding startups and early stage companies such as Brat TV, [17] Eko and SingleStore. [18]

Notable deals

MGM Studios

One of the most notable deals that Anchorage was involved in was investing $500 million in MGM Studios in 2010 to bring it out of bankruptcy. [2] [10] Ulrich joined its board in 2010 and became chairman in 2017. [2] During the period Anchorage held MGM Studios, it had to fight off efforts by activist shareholder, Carl Icahn to take control of MGM studios. [10] [19] Gary Barber was brought in by Ulrich to become CEO in 2010 but a rift between the two grew. [19] In October 2017, Barber received a contract renewal for 5 years until 2022. [19] But only several months later, he was fired and given a $260 million severance package. [10] [19] He was never replaced and in the interim, the company was led by the newly formed "Office of the CEO". [19] In 2021, MGM studios was sold to Amazon for $8.45 billion which resulted in a $2 billion profit for Anchorage. [20] [19]

J.Crew

On May 4, 2020, J.Crew announced that it would apply for bankruptcy protection amidst the COVID-19 pandemic. [21] On September 11, 2020, it was announced that J.Crew had exited bankruptcy after Anchorage invested in it. [2] [4] [22] [23]

Disputes

In 2013, BNP Paribas sued Anchorage Capital after it agreed to purchase $60 million worth of debt from Irish Bank Resolution Corporation and then failed to pay. [13] [24] The court ruled in favour of BNP Paribas. [24]

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References

  1. ↑ "Form ADV" (PDF). SEC. Retrieved November 25, 2022.
  2. 1 2 3 4 5 6 7 8 9 Natarajan, Sridhar; Burton, Katherine (December 15, 2021). "Anchorage to Close $7.4 Billion Hedge Fund as Ulrich Era Ends". Bloomberg.com. Retrieved November 25, 2022.
  3. 1 2 3 4 Chung, Juliet; Wirz, Matt. "WSJ News Exclusive | Anchorage Capital Is Closing $7.4 Billion Flagship Hedge Fund". WSJ. Retrieved November 25, 2022.
  4. 1 2 3 4 "Distressed debt titans Anchorage and Oaktree reveal industry shift". Financial Times. January 17, 2022. Retrieved November 25, 2022.
  5. ↑ "The Vulture Funds". Business Today. July 13, 2015. Retrieved November 25, 2022.
  6. ↑ Shapiro, Jonathan; Thompson, Sarah (March 16, 2017). "Slater & Gordon ownership passes to hedge funds". Australian Financial Review. Retrieved November 25, 2022.
  7. 1 2 3 "Anchorage Capital Group". Institutional Investor. Retrieved November 25, 2022.
  8. 1 2 3 "Former Goldman Bank Traders Take In Outside Capital". GlobalCapital Securitization. October 21, 2003. Retrieved November 25, 2022.
  9. ↑ Ma, Liqian (August 5, 2019). "Pathways to Sustainable Investing: Insights from Families and Peers". Cambridge Associates. Retrieved November 25, 2022.
  10. 1 2 3 4 "Kevin Ulrich". Variety. December 17, 2021. Retrieved November 25, 2022.
  11. 1 2 Orr, Leanna (November 12, 2020). "Anchorage Capital Did Not Disclose CEO's Sexual Battery Suit to Investors, Sources Say". Institutional Investor. Retrieved November 25, 2022.
  12. ↑ Lang, Brent; Donnelly, Matt (November 10, 2020). "MGM Board Chair Kevin Ulrich Accused of Sexual Battery in Now-Discontinued Lawsuit". Variety. Retrieved November 25, 2022.
  13. 1 2 Chellel, Kit (May 29, 2013). "BNP Sues Anchorage Capital Over $60 Million Irish Debt Sale". Bloomberg.com. Retrieved November 25, 2022.
  14. ↑ "Hedge fund Anchorage Capital seeks controlling stake in Ireland's eir". Reuters. October 27, 2016. Retrieved November 25, 2022.
  15. ↑ Clover, Julian (December 20, 2017). "Eir to be sold to private investment firm". Broadband TV News. Retrieved November 25, 2022.
  16. ↑ Bowie, Justin (November 6, 2018). "Fashion retailer to close up to 100 stores - City round-up". businessInsider. Retrieved November 25, 2022.
  17. ↑ Crichton, Danny (July 18, 2018). "Brat raises $30 million to reboot scripted television for the Gen Z crowd". TechCrunch. Retrieved November 25, 2022.
  18. ↑ Lunden, Ingrid (December 8, 2020). "SingleStore, formerly MemSQL, raises $80M to integrate and leverage companies' disparate data silos". TechCrunch. Retrieved November 25, 2022.
  19. 1 2 3 4 5 6 Doherty, Katherine; Gilblom, Kelly (May 27, 2021). "Kevin Ulrich Scored a $2 Billion MGM Win. It Only Took a Decade". Bloomberg.com. Retrieved November 25, 2022.
  20. ↑ Chung, Juliet (May 26, 2021). "Amazon Deal for MGM Marks Long-Awaited Win for Hedge Funds". WSJ. Retrieved November 25, 2022.
  21. ↑ Isidore, Chris; Meyersohn, Nathaniel (May 4, 2020). "J.Crew has filed for bankruptcy | CNN Business". CNN. Retrieved November 25, 2022.
  22. ↑ Unglesbee, Ben (August 26, 2020). "J. Crew exits bankruptcy". Retail Dive. Retrieved November 25, 2022.
  23. ↑ Driver, Robin (September 11, 2020). "J.Crew emerges from bankruptcy, outlines new strategy". FashionNetwork.com. Retrieved November 25, 2022.
  24. 1 2 "BNP Paribas wins jurisdictional battle with Anchorage hedge funds". Fountain Court Chambers. October 10, 2013. Retrieved November 25, 2022.
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