Platinum Campaign Reverses Asset Slide
Platinum Partnersí flagship fund is on the verge of returning to its pre-crash size.
A marketing campaign that began in 2010 has pushed the New York firmís Platinum Partners Value Arbitrage Fund back up to $700 million. Thatís just $30 million shy of its 2008 peak.
Platinum hopes to have more than $1 billion in the fund by yearend. Its in-house marketers, Ed Ho and Greg Zaffiro, have meetings planned for the coming months with potential backers, including wealthy individuals, family offices, institutional investors and fund distributors in the U.S., Europe and Asia.
A wave of investor redemptions prompted Platinum founder Mark Nordlicht to gate Platinum Partners Value Arbitrage Fund in 2008. The vehicleís assets continued to shrink from there, to a low of $420 million just before marketing efforts resumed.
The contraction came despite strong returns from the fund. The entity gained 4.4% in 2008, even as the average hedge fund lost 19%, and has never had a down year. Since its inception in January 2003 with just $50 million from Platinumís partners and their friends and families, it has produced average annual gains of 20.5%. It was up 4% in the first quarter of this year.
The multi-strategy fundís investments include equities, energy contracts and convertible debt.
Overall, Platinum manages $1.1 billion ó the most it has ever run. Of that amount, $275 million is in a vehicle called Platinum Partners Credit Opportunities Fund that writes loans to individuals. That fund launched in October 2005 with less than $25 million and has gone on to book average annual gains of 15.2% since then, with no down years. Itís up 4% so far this year.
The rest of Platinumís money, $30 million, is in a fund called Platinum Partners Liquid Opportunities Fund that is a more-liquid version of the firmís flagship vehicle. It has gained an average of 17% per year since its inception in July 2009. It lost 3.4% in 2011, but has bounced back with a 12% gain in the opening months of this year.
Nordlicht runs Platinumís funds alongside Uri Landesman, who arrived in 2010 from ING Investment. Nordlicht previously founded and led West End Capital, a New York private equity firm, and before that started commodities trader Northern Lights Trading. Ho is his newest employee, having arrived in December as head of business development from Altima Partners of London.