Institutional Investor's Alpha Magazine - April 2008 - (Page 41)

AK Steel Corp., Canadian phone company BCE, software company Cognos, FNX Mining Co. and MasterCard. Dinan, who is known for buying stakes in companies on the cheap, paid $21 million in 2004 for the lavish Manhattan duplex apartment of former Tyco International CEO Dennis Kozlowski, which the company had been trying to sell for nearly a year. Dinan was legendary for pulling all-nighters in his previous life at investment bank Donaldson, Lufkin & Jenrette. Joe DiMenna, 49, has been on a roll. The manager of New York–based Zweig-DiMenna has racked up doubledigit returns for each of the past ﬁve years, culminating in last year’s breathtaking 80 percent net return. DiMenna, a bottom-up specialist, beneﬁted on the long side from positions in basic materials, energy, communications and media, and technology, and on the short side in ﬁnancial services, homebuilding and other consumer-oriented sectors. In 2006, before most other managers saw it coming, DiMenna sensed stress in homebuilding and credit-related industries. DiMenna joined Zweig Cos. in 1977 when he was a student at Connecticut’s Fairﬁeld University, shortly after having written a letter to his mentor, Martin Zweig, whose popular newsletter, The Zweig Forecast, he read avidly. Today, Zweig continues in his role as a company strategist. PHOTO BY NAJLAH FEANNY/DIGITAL RAILROAD 13 Joseph DiMenna Zweig-DiMenna Partners $450 MILLION 27 David Tepper opposed the Barclays bid to buy Dutch bank ABN Amro because he thought the U.K. bank was overpaying. (ABN Amro was eventually sold to a consortium led by Royal Bank of Scotland.) He is a generous donor and likes to put his name on buildings, such as the David Slager Jewish Student Centre and the David and Lara Slager Mikvah (a Jewish ritual bathhouse), both at Oxford University. departure of sorts for the traditionally long-only manager. Klarman, 50, started Baupost with $27 million from four wealthy families. Today the ﬁrm manages $7 billion and annual returns have averaged nearly 20 percent. Perhaps Klarman’s greatest undervalued asset is an out-of-print book he wrote in 1991: Although it originally sold for $25 a copy, Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor is now being offered on EBay for $1,850. 15 Seth Klarman Baupost Group $425 MILLION 13 David Slager Atticus Capital $450 MILLION David Slager was on ﬁre again last year, generating a 28 percent net return on the Atticus European fund. Slager, 35, the second Atticus manager on this year’s list, often plays the heavy in activist showdowns with corporations. “Directors need to understand that they don’t own the companies — we do,” Slager told the Sunday Times of London last year. “They shouldn’t be persuaded by individuals, but if the collective body is in agreement, they must act.” Last year he Longtime value investor Seth Klarman isn’t afraid to stash his assets in cash if he can’t ﬁnd investments worth buying. When 2007 began, Klarman, whose heroes include iconic value managers Benjamin Graham and Warren Buffett, had nearly half of Boston-based Baupost Group’s assets in cash. Everything seemed to go right for him last year, as he posted a roughly 52 percent net return, the best annual performance in his ﬁrm’s 25-year history. The bulk of the gain came from a short credit position using credit default swaps, which signaled a 16 Lawrence Robbins Glenview Capital Management $420 MILLION New York–based Glenview Capital Management founder Larry Robbins likes British pubs. So much so that he said in a speech at an investment conference in December that he was investing in three pub chains: Enterprise Inns, Mitchells & Butlers and Punch Taverns. Opportunism is his signature, and in 2007, Robbins scored with big bets on pharmaceuticals companies, shrewd shorts on mortgages and APRIL 2008 • INSTITUTIONAL INVESTOR’S ALPHA • 41

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

Institutional Investor's Alpha Magazine - April 2008 Contents Letter from the Editor Longs & Shorts Pension Corner: Here to Eternity The Good Guys: Voice of Hope Cover Story: The Kings of Cash Where the Money Is Into the Light Interview: Proceeding with Caution Strategies: A Convenient Truth Alpha Bytes: Village Voice Unhedged: Commentary: No Time for Complacency

Institutional Investor's Alpha Magazine - April 2008

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