History
The firm was founded in 2003 by Jamie Mai as a family office to diversify the capital of his father, Vincent Mai, who ran the private equity firm AEA Investors, one of the oldest leveraged buyout firms in the United States. [1] [3] [4]
Jamie Mai became president and chief investment officer. Charlie Ledley, a former private equity colleague, joined the firm shortly thereafter. In 2005, Ben Hockett joined as head trader, bringing extensive knowledge of capital markets, derivatives, and fixed income trading. [1]
Cornwall Capital was one of a few investors who saw and shorted the subprime mortgage crisis market before its 2007 collapse. Author Michael Lewis wrote in his 2010 book The Big Short that they were perhaps one out of 20 investors in the world who did so. [2] [5] This particular trade generated 80 times the initial investment. [1] Ledley, Mai, and Hockett were featured in the film adaptation of The Big Short , fictionalized with the names Charlie Geller, Jamie Shipley, and Ben Rickert, and played by John Magaro, Finn Wittrock and Brad Pitt. [6]
Ledley left Cornwall in 2009 to join a large Boston-based hedge fund. [1]
Hockett has remained at the firm as the head trader and chief risk officer. Other senior members include partners JC de Swaan and Ian Haft. [7] [8]
In May 2011, Mai began opening the fund to a few like-minded investors with whom he could share ideas. [1]
In 2012, Mai's investment strategy was described in Jack D. Schwager's book Hedge Fund Market Wizards, which purported to examine the world's greatest hedge fund experts and their strategies. [1]
In 2013, Cornwall Capital was reported to have become the largest shareholder of chemicals manufacturer American Pacific Corporation, a NASDAQ-listed U.S. company, with close to 15% of the outstanding stock. [9] American Pacific Corporation agreed to nominate Haft for election to its board of directors in order to resolve a potential proxy contest. [10] American Pacific Corporation was sold to H.I.G. Capital in January 2014. [11]
The Bear Stearns Companies, Inc. was an American investment bank, securities trading, and brokerage firm that failed in 2008 during the 2007–2008 financial crisis and the Great Recession. After its closure it was subsequently sold to JPMorgan Chase. The company's main business areas before its failure were capital markets, investment banking, wealth management, and global clearing services, and it was heavily involved in the subprime mortgage crisis.
A collateralized debt obligation (CDO) is a type of structured asset-backed security (ABS). Originally developed as instruments for the corporate debt markets, after 2002 CDOs became vehicles for refinancing mortgage-backed securities (MBS). Like other private label securities backed by assets, a CDO can be thought of as a promise to pay investors in a prescribed sequence, based on the cash flow the CDO collects from the pool of bonds or other assets it owns. Distinctively, CDO credit risk is typically assessed based on a probability of default (PD) derived from ratings on those bonds or assets.
Event-driven investing or Event-driven trading is a hedge fund investment strategy that seeks to exploit pricing inefficiencies that may occur before or after a corporate event, such as an earnings call, bankruptcy, merger, acquisition, or spinoff. In more recent times market practitioners have expanded this definition to include additional events such as natural disasters and actions initiated by shareholder activists. However, merger arbitrage remains the best-known investment strategy within this group.
Jack Schwager is a trader and author. His books include Market Wizards (1989), The New Market Wizards (1992), Stock Market Wizards (2001) and Unknown Market Wizards: The best traders you've never heard of (2020). He is a well-known author, fund manager and an industry expert in futures and hedge funds. He's published a number of books, such as Market Wizards.
Joel Greenblatt is an American academic, hedge fund manager, investor, and writer. He is a value investor, alumnus of the Wharton School of the University of Pennsylvania, and adjunct professor at the Columbia University Graduate School of Business. He runs Gotham Asset Management with his partner, Robert Goldstein. He is the former chairman of the board of Alliant Techsystems (1994–1995) and founder of the New York Securities Auction Corporation. He was a director at Pzena Investment Management, a firm specializing in value investing and asset management for high net worth clients.
Commodities Corporation was a financial services company, based in Princeton, New Jersey, that traded actively across various commodities. The firm was noted as one of the leading commodity and futures trading firms. CC is credited for launching the careers of many notable hedge fund investors and for its influence on global macro investing.
Lawrence D. Hite is a hedge fund manager who, along with Ed Seykota, is one of the forefathers of system trading. He is the author of the book, The Rule: How I Beat the Odds in the Markets and in Life—and How You Can Too, which was named a Wall Street Journal, LA Times, and Porchlight Books bestseller.
The subprime mortgage crisis impact timeline lists dates relevant to the creation of a United States housing bubble and the 2005 housing bubble burst and the subprime mortgage crisis which developed during 2007 and 2008. It includes United States enactment of government laws and regulations, as well as public and private actions which affected the housing industry and related banking and investment activity. It also notes details of important incidents in the United States, such as bankruptcies and takeovers, and information and statistics about relevant trends. For more information on reverberations of this crisis throughout the global financial system see 2007–2008 financial crisis.
A synthetic CDO is a variation of a CDO that generally uses credit default swaps and other derivatives to obtain its investment goals. As such, it is a complex derivative financial security sometimes described as a bet on the performance of other mortgage products, rather than a real mortgage security. The value and payment stream of a synthetic CDO is derived not from cash assets, like mortgages or credit card payments – as in the case of a regular or "cash" CDO—but from premiums paying for credit default swap "insurance" on the possibility of default of some defined set of "reference" securities—based on cash assets. The insurance-buying "counterparties" may own the "reference" securities and be managing the risk of their default, or may be speculators who've calculated that the securities will default.
Credit rating agencies and the subprime crisis is the impact of credit rating agencies (CRAs) in the American subprime mortgage crisis of 2007–2008 that led to the financial crisis of 2007–2008.
Michael James Burry is an American investor and hedge fund manager. He founded the hedge fund Scion Capital, which he ran from 2000 until 2008 before closing it to focus on his personal investments. He is best known for being among the first investors to predict and profit from the subprime mortgage crisis that occurred between 2007 and 2010.
Magnetar Capital LLC is a hedge fund based in Evanston, Illinois. The firm was founded in 2005 and invests in fixed-income, energy, quantitative, and event-driven strategies. The firm was actively involved in the collateralized debt obligation (CDO) market during the 2006–2007 period. In some articles critical of Magnetar Capital, the firm's arbitrage strategy for CDOs is described as the "Magnetar trade".
Paulson & Co., Inc. is a family office based in New York City. Previously, it was a hedge fund established by John Paulson in 1994. Specializing in "global mergers, event arbitrage, and credit strategies", the firm had a relatively low profile on Wall Street until its hugely successful bet against the subprime mortgage market in 2007. At one time the company had offices in London and Dublin.
Steven Eisman is an American businessman and investor known for having shorted collateralized debt obligations (CDOs), thereby profiting from the collapse of the US housing bubble in 2007–2008.
HGGC, LLC is an American middle-market private equity firm based in Palo Alto, California, with over $7 billion of cumulative capital commitments. Since its inception in 2007, HGGC has completed transactions with an aggregate transaction value of $50 billion. The firm was named 2014 M&A Mid-Market Private Equity Firm of the Year by Mergers & Acquisitions magazine.
Pine River Capital Management is an American asset management firm based in Minnetonka, MN. The firm traded its investors funds using stocks, fixed income, derivatives and warrants.
The Big Short is a 2015 American biographical crime comedy-drama film directed and co-written by Adam McKay. Co-written by Charles Randolph, it is based on the 2010 book The Big Short: Inside the Doomsday Machine by Michael Lewis showing how the 2007–2008 financial crisis was triggered by the United States housing bubble. The film stars Christian Bale, Steve Carell, Ryan Gosling, and Brad Pitt, with John Magaro, Finn Wittrock, Hamish Linklater, Rafe Spall, Jeremy Strong, and Marisa Tomei in supporting roles.
The Greatest Trade Ever: The Behind-the-Scenes Story of How John Paulson Defied Wall Street and Made Financial History is a debut non-fiction book by American journalist Gregory Zuckerman. The book was released on November 3, 2009, by Crown Business. The book investigates the reasons and consequences of the subprime mortgage crisis and the role that hedge fund manager John Paulson played in those events.
York Capital Management is a global institutional investment management firm with approximately $18.5 billion in assets under management as of June 2019. The firm was founded in 1991 by Jamie Dinan.
