Institutional Investor's Alpha Magazine - February 2008 - (Page 5)

Longs Mystery Man P op quiz: Who is Jonathan Wood? A) a ruthlesstrader-turned-hedge-fund-manager who thrills to the hunt; B) a cold and calculating genius with a quirky sense of humor; C) a multimillionaire with a Robin Hood complex; or D) some combination, perhaps, of all of the above. Wood, 46, was little known in the U.S. before late January, when his two-year-old hedge fund, SRM Global Fund, announced that it had taken a 5.2 percent stake in Countrywide Financial Corp., saying that the price being offered for the troubled mortgage lender by Bank of America Corp. was too low. But Wood, whom London traders called Keyser Söze, after the quick-change crime boss of the 1995 thriller The Usual Suspects, was already established in the U.K. Before launching SRM, Wood (who shuns the press and declined to be interviewed) was a proprietary trader in the equities group at UBS. There he came to public attention in 2000 for demanding that the investment bank Lazard, founded more than 150 years ago, change its byzantine managerial structure to better beneﬁt minority shareholders. The Lazard battle proved proﬁtable for UBS, as well as for Wood, whose stature grew. Other successes followed, but it was Wood’s involvement in a lawsuit against the majority shareholders of Gadgetshop, a U.K. retail company that went bankrupt in 2005, that landed him in the news. After testimony that included details of boardroom insults and drunken discussions in Monaco bathrooms, Wood lost. In summing up, the judge opined that Wood “came across as a very hard and calculating man.” Wood — who once had the ribald comedian Sacha Baron Cohen of Borat fame perform at his birthday party — has been a champion of the underdog, or at least of minority shareholders, and purports to be on the side of good in the fallout from the subprime crisis. He launched SRM, based in Monaco, with more than $3 billion in assets, including a $500 million investment from UBS, which is also the fund’s prime broker. The fund’s ﬁrst truly high-proﬁle investment was in Northern Rock, the U.K.-based mortgage lender suffering from subprime credit troubles. In September, Northern Rock received an emergency credit line from the Bank of England, signaling concerns about its creditworthiness and causing an old-fashioned run on its own holdings. SRM and U.K.-based hedge fund RAB Capital swooped in and bought shares. Now Wood has taken his show Stateside with his investment in Countrywide. It could be the ﬁrst of many battles by Wood and & Shorts Jonathan Wood, better known in the U.K. than in the U.S., is making a play to raise the price of a Countrywide buyout. SRM Global, which promotes itself as an activist investor in European and American companies. — Imogen Rose-Smith Activist R Uptick amius Capital Group is on the attack. Last year the New York–based hedge fund ﬁrm waged ten campaigns against U.S. companies, making it the leadFEBRUARY 2008 • INSTITUTIONAL INVESTOR’S ALPHA • 5 Illustration by Joshua Gorchov for Alpha

Table of Contents Feed for the Digital Edition of Institutional Investor's Alpha Magazine - February 2008

Institutional Investor's Alpha Magazine - February 2008 Contents Letter from the Editor Longs & Shorts Pension Corner: Alternative Perspective The Good Guys: A Simple Plan Cover Story: Energy and Commodities: Fueling Opportunity Regulation: Energy Trading: The Brawl on the Hill Interview: Master of Values Regulation: Hedge Fund Registration: Way Out West Research Center: Top Hedge Fund Analysts Alpha Bytes: Rocket Man Unhedged: Commentary: Structured for Success

Institutional Investor's Alpha Magazine - February 2008

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