Strategic Value Partners, LLC is an investment management firm with more than $12 billion in assets under management (AUM). It currently manages a total of 40 pooled investment vehicles, eight of which are hedge funds. The firm currently employs 49 advisors.
It's important to understand that hedge funds are often complex, loosely regulated investments and therefore only accessible to accredited investors. If you're looking for trusted and comprehensive support in managing your own finances, consider speaking to a professional financial advisor.
Strategic Value Partners Background
Strategic Value Partners, LLC - also known as SVP - was established in Delaware in 2001. The firm is privately held and specializes in alternative investments. SVP provides investment management services on a discretionary basis to pooled investment vehicles, which it calls "Client Funds." It also provides these services to separately managed accounts.
Strategic Value Partners, LLC is headquartered in Greenwich, Connecticut. The sole managing member of the firm is Midwood Holdings, LLC. Victor Khosla is a founder and the sole member of Midwood Holdings, LLC. Khosla also controls Midwood, LP, which is a member and the majority owner of SVP.
Strategic Value Partners, LLC provides investment advice to pooled investment vehicles, which include an open-ended “hedge fund” style structure and a closed-ended “private equity” style fund structure, as well as managed accounts and funds-of-one (which are funds with one dedicated investor).
The firm does not impose any minimum requirements on client funds. the Client Funds, however, generally impose minimum investment amounts on investors. As the investment manager for the Client Funds, SVP reserves the right to adjust account size minimums as it deems appropriate. The firm may impose certain account minimums on managed account and funds-of-one clients, which will be specified in detail in the agreement and managing documents.
The firm conducts investment management activities according to each respective Client Funds' confidential governing documents. Clients and/or investors may impose restrictions on the way the firm manages these. These restrictions and or limitations are described in the governing documents. The terms of individually managed accounts are negotiated individually with each particular client.
Strategic Value Partners Investment Philosophy
SVP’s investment strategies are generally focused on investing assets around the world (although it is primarily focused in the U.S. and Europe) - in distressed opportunities.
The firm seeks to use a rigorous, disciplined and organized investment process. The goal of the firm is to create value through proactive proprietary sourcing, intensive analysis, execution as well as portfolio monitoring and management. Specific investment strategies, approaches to analysis and material risks that apply to each client fund are described in detail in each respective governing document. Generally, however, the firm uses a variety of investment strategies.
The firm's "Idea Generation" approach is a more proactive approach that involves the expectation of every member of the firm's team (from its CIO to its junior analysts) to generate ideas. The investment team studies sectors in detail and the sourcing team communicates with a variety of intermediaries about particular opportunities.
The firm's due diligence process is based on strong fundamental research as well as on being data- and experientially driven. It draws upon a proprietary network of relationships - including management teams, industry experts and specialists - to gauge its analyses. It may also use third parties to gather information as well, but does not use third parties to make investment conclusions. The firm seeks to understand industry trends and detail and develop its own databases or analyses with the information it compiles. It also seeks to identify the key drivers and risks that company may face.
Of course, all current and potential clients should be aware that no investment strategy can guarantee against risk of loss.
Largest Hedge Funds Managed by Strategic Value Partners
Strategic Value Special Situations Master Fund IV, LP
- AUM: $3,067,073,607
- Minimum: $5 million
- Beneficial Owners: 150
Strateigic Value Master Fund, Ltd.
- AUM: $1,973,465,033
- Minimum: $5 million
- Beneficial Owners: 280
Strategic Value Special Situations Master Fund III, LP
- AUM: $1,630,395,856
- Minimum: $5 million
- Beneficial Owners: 474
Strategic Value Opportunities Fund, LP
- AUM: $1,321,294,650
- Minimum: $5 million
- Beneficial Owners: 2
Strategic Value Special Situations Master Fund II, LP
- AUM: $607,011,251
- Minimum: $5 million
- Beneficial Owners: 46
Fees at Strategic Value Partners
Fees at Strategic Value Partners, LLC include fees based on AUM, or assets under management. These fees range from 2.5% per year of a client’s net AUM, plus performance-based fees that usually amount to 20%.
Different funds have different structures. The Restructuring Fund has an open-ended fund structure, which means it has no limit on the number of shares it can issue. The Special Situation Funds and the Dislocation Fund have a closed-ended fund structure; closed-end funds have a fixed number of shares to trade. The Global Opportunities Funds are also closed-end funds. According to the firm, an open-ended fund structure indicates a hedge fund style structure and closed-ended indicates a private equity style structure.
Beyond this, other additional fees and expenses may apply - including but not limited to registration fees, maintenance fees, certain taxes and regulatory expenses - so it is imperative that potential and existing clients read the offering documents carefully and reach out about specific fees charged to their fund.
What to Watch Out For
Again, it's important to understand that hedge funds are often complex, loosely regulated investments and therefore accessible only to accredited investors. Such investors differ from retail investors or individual investors, who might be taking a more DIY approach or enlisting the services of a financial advisor.
Within the past 10 years, Strategic Value Partners has not undergone any disciplinary or legal action deemed material to a client’s evaluation of its business integrity. That said, as an SEC-registered investment manager, the firm is legally obligated to uphold its fiduciary duty and work in clients’ best interests at all times. You can view its latest Form ADV on the official website of the Securities & Exchange Commission (SEC).
Becoming a Client of Strategic Value Partners
If you are an accredited investor and wish to become a client of Strategic Value Partners, you can visit the firm's website or call (203) 618-3500.
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