Looking back on an ex-Maverick launch

By Josh Friedlander

Wed Sep 25, 2013

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Absolute Return also catches up with HEAT.

One year ago

Ex-Maverick partner Steve Galbraith was prepping a major launch. The firm, Herring Creek Capital Management, began trading its global equity Herring Creek Fund in May. At Maverick, Galbraith had been one of 16 partners and chief macroeconomic strategist, reporting directly to founder Lee Ainslie. Before Maverick, he served as CIO and chief U.S. investment strategist of Morgan Stanley.

According to a recent regulatory filing, Herring Creek managed nearly $230 million as of June 1. The firm did not return a call seeking comment.

Five years ago

Cantillon Capital Management alumnus Santtu Seppala was preparing to launch Kiitos Capital Management in Beverly Hills, Calif. Born in the opening days of the financial crisis, the equity long/short healthcare-focused fund ended the year down only 0.23% (data here) and then enjoyed two years of steady gains before hitting a rough patch in 2010-11. The fund is up again this year, with a return of 2.47% through July.

"We continue to focus on global HEAT (healthcare, environment and agriculture trends)," said founder and portfolio manager Seppala, citing the growth in the incidence of diabetes as one such trend. "Healthcare continues to be a really interesting area to invest in especially in emerging markets. We continue to have exposure in areas like South Africa and Indonesia. We like demographic trends in those markets."

One trend he mentioned was that emerging market governments are beginning to reimburse for healthcare. "You have an emerging middle class with really no healthcare insurance, but that's changing. More insurance usage, whether drug usage or device usage, is helping companies like Aspen Pharmacare, which is one of our holdings."

ISSN: 2151-1845 / CDC10004H

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