10/30/2013

Former ESL Pros Open Activist Operation

Two ESL Investments alumni have teamed up with a fomer Old West Investment portfolio manager to start an activist hedge fund.

Working through their Ashe Capital, former ESL executives William Crowley and William Harker and Old West co-founder Stephen Blass launched their Ashe Capital Partners vehicle this month with $112 million.

In a bid to avoid diluting returns, the trio plans to cap contributions at $1 billion. But they may form sidecar vehicles to create capacity for individual deals that are larger than the fund alone would permit.

Like ESL, Ashe is following a value-driven strategy in which it is assembling a concentrated portfolio of stakes in companies whose operations it could help steer. Unlike ESL, however, it avoids running those businesses directly.

As part of the strategy, Ashe plans to work cooperatively with existing management.

Crowley and Harker worked together for more than 10 years at ESL, leaving in 2012 when founder Eddie Lampert relocated the $6 billion operation from Greenwich, Conn., to Bay Harbor, Fla. Crowley was president and chief operating officer, with Harker served as general counsel.

Both also held executive positions with ESLís most prominent portfolio company, Sears Holdings, and continue to serve on the board of affiliate Sears Canada. Harker is on the board of Sears spinoff Sears Hometown as well.

Blass helped start Old West in 2008 after a stint at Ampere Capital, and remained on board until this year. He ran a variety of equity and credit-product investments at the Los Angeles firm, which had $187 million under management as of Feb. 28.

Also on board at Ashe are former Old West analysts Brent Humphreys and Christopher Phelps. Humphreys spent only a few months at Old West, having previously worked at New York hedge fund shop Knott Capital.

Ashe is based in New York, but Blass is stationed in Los Angeles ó where Humphreys and Phelps also may be located.

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