Two Hedge Fund Vets Are Joining Forces To Create An Activist Fund With Serious Chops

It seems like a lot of hedge funds are adopting an activist strategy these days, but not everyone is going into the game with decades of success on Wall Street under their belts.

However, Jason Ader, of Ader Investment Management, and Andrew Wallach of Cumberland Associates are a special case.

The duo have combined their two funds to create a new NYC-based activist hedge fund, Owl Spring Asset Management.

Together, they bring to the table $US225 million in AUM (about $US30 million of it being their own money), and two distinct investment strategies that have served them very well over their careers.

Ader Investment Management has returned 40% year to date, and used activism to pull off one of the biggest coups in the industry this year — a board shake up at the largest slot machine maker in the world, IGT. Jason Ader also serves as a director of Las Vegas Sands Corp.

Cumberland Associates is different — it’s a deep value fund that has produced a 14.5% annualized return to investors over the last 43 years. Wallach’s sector specialties include media, telecom, tech, and natural resources, and, on its own, Cumberland has $US105 million assets under management.

So why the change?

“Generally, companies get complacent, boards get complacent,” said Ader. “When you have a board running a business like caretakers, they forget they’re supposed to be creating value for shareholders.”

He added that a lot of companies have stock-piled cash during rough markets.

That means, in other words, it’s time for a shake up.

Ader and Wallach met two years ago through a family office seeding platform that Ader ran out of his hedge fund. Once they got to talking, they saw a bunch of opportunities for activism or constructivism in Wallach’s portfolio.

“I’ve been frustrated over the years,” said Wallach. “I can’t tell you how many companies I’ve tried to explain to share repurchase to. I’m tired of it.”

So no more Mr. Nice Guy.

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