Steel's Warren Lichtenstein upended

Mon Mar 30, 2009



The founder of Steel Partners gets turned on his head as investors successfully agitate for a new restructuring plan.


The founder of Steel Partners gets turned on his head as investors successfully agitate for a new restructuring plan. By Irwin Speizer


Late last year, activist hedge fund manager Warren Lichtenstein thought he had hit upon a clever solution to the big redemption run on his Steel Partners II Fund. He proposed rolling the fund into a publicly listed shell company that his firm already controls. Instead of kudos, the portfolio manager got a taste of his own medicine, as angry Steel investors banded together, using some of his own activist tactics to oppose the move.

Lichtenstein's investors had reason to be upset. His signature fund, Steel Partners II, which held about $1.2 billion in assets at yearend, lost 39% in 2008. As redemption requests grew to represent some 40% of assets, Steel halted withdrawals and proposed his restructuring plan, which investors called unfriendly at best and a breach of...

ISSN: 2151-1845 / CDC10004H

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