CarVal Investors, LP is a large hedge fund manager located in Minneapolis, Minnesota. With 68 financial Advisors, the firm has more than $17.7 billion in assets under management spread across 61 pooled investment vehicles or funds. CarVal Investors focuses on loan portfolios, corporate securities, structured credit, hard assets, as well as undervalued assets.
Only accredited investors who satisfy specific net worth or income requirements have access to hedge funds. If you don’t qualify as an accredited investor, you still may want to work with a financial advisor who can help manage your investment portfolio.
CarVal Investors Background
CarVal Investors was founded in 1987 by Cargill, the global food corporation also based in Minnesota. In 2006, the firm became an independent subsidiary of Cargill and separated from the conglomerate entirely in 2019 when CarVal’s senior management team bought out Cargill’s ownership interest in the firm.
CarVal Investors is led by a trio of managing principals: Lucas Detor, James Ganley and Jody A. Gunderson. The firm, which also has offices in Europe and Asia, works with institutional investors and accredited investors. Approximately 18% of CarVal-managed funds investors come from outside the U.S.
CarVal Investors Investment Philosophy
CarVal-managed funds invest in corporate securities, structured credit, hard assets and loan portfolios, including residential mortgages, small business loans, and other consumer, commercial and industrial obligations. CarVal Investors also focuses on special opportunity investments, which may be a variety of undervalued situations across a broad spectrum of asset categories.
The firm targets what it calls “capital vacuums” of illiquidity and “orphaned” assets on the balance sheets of financial institutions. Additionally, CarVal-managed funds may require investors to commit capital for a set period of time, ranging from six months to eight years, depending on the investment vehicle.
Largest Hedge Funds Managed by CarVal Investors
CVI CVF IV Master Fund II LP
Minimum: $10 million
Beneficial Owners: 140
CVI CVF III Master Fund II LP
Minimum: $10 million
Beneficial Owners: 113
CVIC Master Fund LP
Beneficial Owners: 266
CVI AA Master Fund II LP
Beneficial Owners: 26
CVI CVF V Pooling Fund II LP
Beneficial Owners: 202
Fees at CarVal Investors
CarVal charges its funds both management and performance-based fees. Management fees range from 1% to 2.5%, although the fees associated with each fund may vary and are described in the fund’s offering documents.
The firm also charges its funds performance-based fees, which typically equal 20% of the net profits of a fund. The firm acknowledges that performance-based fees may incentivize riskier investments that would generate higher performance-based compensation. As a result, the firm requires senior employees to invest their own money in each of its commingled funds.
What to Watch Out For
CarVal Investors does not have any disclosures listed on its Form ADV, uniform documentation mandated by the Securities and Exchange Commission. A disclosure can be any past regulatory, criminal or disciplinary action on a firm’s record.
As noted earlier, investing in hedge funds is not for everyone. To be an accredited investor, you must have a net worth of over $1 million -- not including your primary residence -- or $200,000 of earned income in each of the last two years ($300,000 for couples).
Becoming a Client of CarVal Investors
If you qualify as an accredited investor and wish to invest in funds managed by CarVal Investors, contact the firm directly through its website, https://carvalinvestors.com/, or by calling over the phone, at +1 952 444 4780.
All information is accurate as of the time of this article.
Tips for Investing
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- Knowing the potential tax consequences of selling assets in your portfolio is an important consideration for any investor. Use SmartAsset’s capital gains calculator to find out how much you might owe.