11/17/2010

Perry Departures Highlight Strategy Overhaul

Perry Capital has said good-bye to its last remaining equity specialist, marking the end of a three-year makeover for Richard Perry's hedge fund shop.

Chet Kapoor left the New York firm within the past few weeks, just nine months after making partner. Kapoor, who ran a book of technology, media and telecommunications stocks, was followed out the door by his three-member team: Mendel Hui, a partner since March 2009; Byram Karanjia; and Seth Basham. Kapoor is considering launching his own hedge fund, one market player said, though he could end up taking a job with another firm.

Perry, which had nearly $7 billion under management in the first quarter of this year, has been steadily unwinding its equity business since mid-2007. "We made the decision to go back to Perry Capital's investing roots by returning to our event-driven, deep-value hedged roots," Richard Perry said in a Nov. 9 letter apprising investors of Kapoor's departure.

Perry Capital's investment staff - led by Dave Russekoff, Alp Ercil and Adam Stanislavsky, with input from founders Paul Leff and Perry - spent all of 2008 and the first part of 2009 focused on credit investments. More recently, the firm also has targeted special-situation equities, including financials in the U.S., Europe and Asia. But the equity book is now in the hands of the firm's core event-driven team, not equity specialists like Kapoor.

In his letter to investors, Perry credited Russekoff, Ercil, Stanislavsky and their team with generating all of the firm's 2010 equity gains, which have contributed to an overall 14% year-to-date return.

According to a regulatory filing, Perry owns 75% of the firm, with Leff and 21 other partners dividing up the remaining 25%. Perry Capital employs more than 50 investment professionals.

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