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
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