Macnguyen Protege Readies Equity Offering
A portfolio manager who spent 12 years working under stock-picker Curtis Macnguyen at Ivory Investment is starting his own equity fund.
Brad Lundy plans to begin trading in the first quarter via his newly formed Butler Hall Capital of Los Angeles. Lundy expects his Butler Hall Capital Fund will launch with up to $100 million, including $15 million of his own money.
Butler Hall is offering a low management fee equal to 0.5% of assets. The fund’s performance fee will be a more-standard 20% of profits.
Lundy, who left Ivory in 2016, was among the top three portfolio managers at the Los Angeles firm, along with chief investment officer Macnguyen and co-head portfolio manager Neil Chudgar. Lundy ran a book encompassing value-oriented positions in sectors including auto, energy, industrials and materials. At its peak, Lundy’s portfolio had more than $1 billion.
Butler Hall will take more of a generalist approach to stock-picking, targeting a diversified portfolio of 30-40 long positions and 20-30 shorts, with average net exposure of 50%. As he did at Ivory, Lundy will seek to identify industries undergoing structural changes, focusing on less-understood businesses within those sectors. The fund will amplify its buying power by borrowing up to 50 cents for every dollar of equity capital.
Lundy plans to hire an analyst and an administrator prior to launch.
Ivory was managing about $2.5 billion at yearend 2016. Macnguyen founded the firm in 1998. In 2015, he sold a minority stake to Affiliated Managers Group, a publicly traded company that buys stakes in both alternative and traditional asset managers. At the time of that transaction, Ivory was managing $3.6 billion.