Contrarian Capital Management, LLC is a large, Greenwich, Connecticut-based hedge fund with over $5 billion in total assets under management (AUM). The fund manages 28 pooled investment vehicles, also known as funds, and has a team of financial advisory professionals that is 25 members strong. The firm takes a multi-strategy approach to investing and seeks to create portfolios based on distressed securities.
Not everyone is able to invest in hedge funds, as only accredited investors are eligible. Since the requirements to become accredited are quite stringent, working with a financial advisor could be an easier way to access hedge fund-like investment strategies.
Contrarian Capital Background
Contrarian Capital has been in business for more than 25 years, having been founded and registered with the Securities and Exchange Commission (SEC) in 1995. Jon Bauer is the firm's principal owner, and Janice Stanton and Gil Tenzer are also owners of the firm. Xiao Song and Jeffrey Bauer are special limited members. Each owner may own their share of the firm individually or though other entities.
There are multiple chartered financial analysts (CFAs) on-staff at the firm. Contrarian Capital works with both individual and institutional investors.
Contrarian Capital Investment Philosophy
Contrarian Capital's investment philosophy and strategies revolve around distressed securities, but it doesn't limit itself to only investing in these types of assets. The firm's approach can be described as multi-strategy. Distressed assets typically include corporations, real estate, non-U.S. securities, high-yield securities, senior secured obligations, trade claims and equities. The firm also looks for investments that are traditionally undervalued.
Funds at Contrarian Capital are managed based on a specific strategy or set of strategies, but separately managed client accounts may use strategies that are decided upon with the client. These clients could impose restrictions on the types of investments the firm can purchase on their behalf.
Contrarian Capital specializes in distressed investing, but advisors use a variety of analysis methods to help inform their investment decisions. Advisors may use any combination of fundamental research, charting analysis and cyclical analysis to help drive growth in its accounts and funds.
Largest Hedge Funds Managed by Contrarian Capital
Contrarian Emerging Markets, LP
- AUM: $2,130,093,000
- Minimum: $1,000,000
- Beneficial Owners: 315
Contrarian Capital Fund I, LP
- AUM: $825,666,000
- Minimum: $1,000,000
- Beneficial Owners: 119
Contrarian Centre Street Partnership, LP
- AUM: $276,447,000
- Minimum: $1,000,000
- Beneficial Owners: 5
Contrarian Dome Du Gouter Master Fund, LP
- AUM: $225,613,000
- Minimum: $1,000,000
- Beneficial Owners: 7
Contrarian EM II, LP
- AUM: $223,473,000
- Minimum: $100,000,000
- Beneficial Owners: 2
Fees at Contrarian Capital
Management fees for funds and separately managed accounts at Contrarian Capital vary based upon the specific fund, or client in the case of a separately managed account. These fees typically range from 0.75% to 2% annually and are charged quarterly, in advance.
Contrarian Capital also takes performance-based fees from its funds and other accounts. These fees will generally equal about 20% of gains in any fund or account. Specific fee schedules vary by fund and by account, so reach out to Contrarian directly for more information.
What to Watch Out For
Contrarian Capital does not have any disclosures on its Form ADV.
It's important to note that only accredited investors can invest in hedge funds. To become an accredited investor, you must have at least $200,000 of earned income ($300,000 for couples) in each of the past two years. There must also be a reasonable assumption that the same trend will be true for the coming year. You can also become an accredited investor if you have at least a $1 million net worth, minus the value of your primary residence. You can meet the latter requirement either on your own or together with a spouse.
Becoming a Client of Contrarian Capital
If you're interested in becoming a client of Contrarian Capital, you must be an accredited investor first. If you meet that requirement, you can get in touch with the firm by going online and submitting a contact form, calling the firm or visiting the firm at any one of its offices.
All information is accurate as of the writing of this article.
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