Owl Creek Asset Management, L.P.
With billions in assets under management (AUM), Owl Creek Asset Management is one of the few hedge fund companies to have come out of the financial crisis without suffering major losses. It is based in New York and has a satellite office in Miami Beach, Florida.
Founder Jeffrey Altman famously earned $100 million in 2007, making him one of the highest paid hedge fund managers that year. Following a value-investing strategy, the firm makes big bets on companies it thinks are underpriced.
Owl Creek Asset Management Background
Altman started Owl Creek Asset in 2001. It outperformed during its first decade but has since experienced some headwinds. In its 2019 SEC filings, the firm reported that it was in the process of winding down its Asia funds.
Altman primarily owns the firm. Its two managing directors have minor stakes with three other employees having even smaller stakes.
In 2018, Owl Creek Asset Management was a finalist in Institutional Investor’s event-driven hedge fund manager of the year category.
Owl Creek Asset Management Client Types and Minimum Account Sizes
Technically, the firm’s clients are the private pooled investment vehicles that it advises. Investors in these funds are “accredited investors,” “qualified purchasers” and “non-U.S. persons.” In other words, they are very wealthy individuals, banks and thrift institutions, investment companies, pension and profit-sharing plans, trusts, estates, charitable organizations, corporations, other business entities and private investment funds.
The firm generally requires a $5 million investment, though it may waive the minimum at its discretion. The minimum for additional investments by existing investors is $100,000.
Services Offered by Owl Creek Asset Management
Owl Creek Asset provides investment management services on a discretionary basis. It advises U.S. and offshore funds. The firm also serves as a sub-advisor to other funds.
Owl Creek Asset Management Investing Philosophy
The firm primarily uses bottom-up or fundamental analysis to look for deep value investments or, as Altman told the New York Times, “things that are beaten down” and “things that missed earnings.”
Once it finds these opportunities for its flagship funds, the firm makes purchases or sells short. The financial instruments it considers include: listed and unlisted common stocks, preferred stocks, convertible securities, American Depository Receipts, public and private debt issues (including bank loans and trade claims), rights, warrants, put and call options, swaps, forward contracts, when-issued securities and other derivatives, including futures contracts.
For its credit funds, Owl Creek Asset employs distressed, event-driven and long-short investment strategies. It primarily invests in bank debt, including revolving credit facilities, bridge financings, debtor-in-possession financings, corporate bonds, including high-yield debt, receivables and trade claims, sovereign debt, and credit default swaps and other credit-related derivatives. It may also invest in futures and forward contracts, options, and convertible securities, preferred stock and equities of private and public issuers, as well as asset-backed securities, mortgages, loans, real estate and real estate-related securities.
Fees Under Owl Creek Asset Management
Owl Creek Asset collects management fees based on a percentage of the client’s AUM. Though the firm may waive or negotiate its fees, it generally charges an annual 1.5%, payable quarterly - and 2.0% for one of its offshore funds. It also generally charges a performance-based fee of 20% of net realized and unrealized gains at the end of each fiscal year.
What to Watch Out For
Owl Creek Asset Management does not work with small investors. It also doesn’t offer financial planning or wealth management. For those services, you need a financial advisor who works with individuals. Use SmartAsset’s matching tool to find one who can better meet your needs.
Owl Creek Asset Management had no legal or disciplinary events in the past 10 years to report in its most recent SEC filings.
Opening an Account With Owl Creek Asset Management
To contact Owl Creek Asset, call its New York office at (212) 688-2550. (It does not have a website.)
All information was accurate as of the writing of this article.
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