As a 48-year-old veteran of the asset management industry, Uri Landesman had run billions in equity portfolios for giant players, such as Federated Investments and JP Morgan Investment Management. He’d invested in an array of foreign markets and overseen sprawling staffs of analysts and portfolio managers, most recently at ING Investment Management.
But Landesman, who cut his teeth at Yeshiva University in the mid-1980s as analyst at the venerated research firm Sanford C. Bernstein, had only ever existed professionally in the realm of long-only equity.
Not that there’s anything wrong with that, nor that Landesman was necessarily unsatisfied. But something told him, career wise, there was more out there. So earlier this year while vacationing in south Florida with a close friend and their respective families, Landesman started a conversation up that hinted he may be ready for a change in his job.
The close friend was Mark Nordlicht, a former natural gas trader and founder of Platinum Management, managers of Platinum Partners multistrategy hedge fund, as well as a second fund, a more liquid version of the flagship. In 2009 Platinum notched roughly a 20 percent return following a 2008 that impressively brought a positive single-digit return. Landesman had Nordlicht at hello, or rather at “I may be ready for a change.”
“Pretty soon we were talking about a role for me and what I could offer him,” Landesman said. “I think the fund had grown to a stage where he needed help running the business and overseeing the investment team, while also having someone to scout for new talent and new deals.”
Within a few months Landesman left ING to become Platinum’s president. The Platinum Partners Value Arbitrage Fund, with an energy focus, employs some pretty unconventional approaches. Founded in 2003, Platinum has $535 million in assets. Last year it launched a second fund, the Platinum Partners Liquid Opportunities Fund.
Among the flagship’s nine strategies: Asian convertibles (which involves a team on the ground in Asia); quantitatively driven equity, classic long-short equity, even driven, asset-based lending, physical commodities arbitrage, receivables finance, energy volatility arbitrage and energy location arbitrage.
Let’s take a look at that last strategy for a moment: Essentially, Platinum is betting on natural gas prices at 14 delivery points. A three-person team based in Atlanta runs the book for Platinum. “We are playing spreads between various locations on the West Coast of the U.S.,” Landesman said.
Another strategy – physical commodity arbitrage – is sub-advised for Platinum by Black Elk, a group of Houston-based, ex-Amoco oil and gas professionals. Their specialty is buying up resource rich properties thought to be in declining stage of production. “The seller can be unloading for a couple reasons,” Landesman explained. “Generally, though, they just don’t want to be bothered with the property anymore.”
A growth-oriented company, for example, may want to dispose of an under-producing property, or a company may have underestimated the reserves, perhaps because they didn’t want to do any horizontal drilling to determine the full extent of the available reserves.” Platinum hedges out 80 percent of its price risk via derivatives.
So does Landesman enjoy being a part of an investment operation with so many new tools in the shed? “I’ve always enjoyed doing different things throughout my career,” Landesman said. “I think this was eventually going to happen, and it’s fun to be able to work with Mark.”
Good work if you can get it. And if performance continues – no doubt the money should probably be better too. Not that Landesman joined for the money. He just felt he needed to leave long-only.
Rich Blake is a New York City-based freelance financial journalist. He currently contributes to Institutional Investor magazine, Reuters HedgeWorld and ABCNews.com, among others.
