New York event-driven firm One East Capital Advisors is working to rebuild its assets, having returned to profitability last year, and as it approaches the payout of all redemption requests stemming from its troubles in 2008.
One East, which manages $300 million—substantially below its pre-crisis peak of $2.1 billion—has launched a new fundraising campaign and is said to have taken in several million dollars in new assets.
“Their rebound and their ability to return capital and perform through the re-liquidating of the markets has been better than average,” said one investor in the firm. “Their track record with regard to 2008 was probably better than other people in their space who got hurt by the liquidity crisis. They were fair with investors, whereas there are plenty of gripes to go around regarding many of their peers,” he added.
Launched with $450 million in July 2006 by Sandell Asset Management alumnus Jim Cacioppo and Perry Capital alumnus Nathaniel Klipper, One East’s assets quickly increased to $2.1 billion by January 2008. In the first half of 2008, the firm’s flagship event-driven fund, One East Partners, which invests in risk arbitrage, distressed debt and event-equities, dropped 10.7%. In September 2008, the firm put up gates that restricted redemptions. The firm also implemented side pockets for the fund’s illiquid assets. By the end of 2008, One East Partners had plunged 30%.
By early 2010, One East’s assets had fallen to just over $300 million and several of the firm’s investment professionals, including co-founder Klipper, had left the firm.
Since then, the firm has restructured, with key changes, including the shift to a sole portfolio manager, the elimination of the firm’s illiquid and private investments and the adoption of an investor-level gate, replacing the previous fund-level gate. One East also hired Scott Reid in mid-2010 from Auda Advisor Associates to serve as president. He oversees operations, business development and client relations.
One East Partners gained 36.1% in 2009, 19.9% in 2010 and was up 3.9% this year through the end of February. The firm reached its high water mark the first quarter of 2010 and, as of the end of March, has paid back more than 90% of the money it side pocketed, with the remainder expected to be returned by year-end.