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97. Perry Capital / $6.425 billion

Location:

New York, NY

Founded:

1988

2015 Hedge Fund 100 Rank:

No. 68

2015 Capital:

$9.745 billion

2014 Hedge Fund 100 Rank:

No. 65

2014 Capital:

$9.75 billion

Years on List:

Website:

www.perrycap.com

Address:

767 Fifth Avenue, 19th floor
New York, NY 10153

Phone:

212-583-4000

Fax:

212-583-4146

Other Offices:

U.K., San Francisco and Washington, D.C.

Profile & News

Firm Overview

Richard Perry, founder, president and CEO of New York–based Perry Capital, rarely makes public appearances, but his eponymous hedge fund firm’s activist positions frequently make headlines. In July 2013, Richard Perry filed suit against the U.S. Treasury Department to privatize mortgage giants Fannie Mae and Freddie Mac (of which Perry Capital owns a senior class of preferred stock) and to prevent the duo from being liquidated. That same month, he attended the Delivering Alpha conference, making a rare public appearance, where he outlined his bets on Japan, Greece and China. At the time he was holding Greek government bonds and shorting Japanese corporate bonds.

Perry Capital was one of several hedge fund firms to retreat from J.C. Penney in 2013. The firm, which began as a risk arbitrage fund in 1988, reduced its 8.6 percent stake in the retailer to 3.8 percent that October. Perry, which has only just acquired 12 million shares of J.C. Penney a few months before, was prompted by William Ackman’s move to sell Pershing Square Capital Management’s entire 39-million-share stake on August 27, and by the retailer’s ninth consecutive quarter of declining revenue. By the end of the fourth quarter, Perry Capital had also sold the remainder of its stake.

This was not the first time Perry has taken cues from Ackman. Perry Capital boosted its stake in Herbalife by 60 percent to $4.1 billion at the end of March 2014, making it Perry’s fourth largest holding in the first quarter. Ackman has been shorting the company for months on the premise that it is a pyramid scheme.

Investors are pleased with Perry Capital’s recent spate of success. The firm earned an A on Alpha’s 2014 Hedge Fund Report Card, making it the sixth-highest-ranked hedge fund firm on the ranking. Investors were happiest with Perry’s alignment of interests, transparency, independent oversight, liquidity and investor relations, giving it an A in each category. The firm is in the running for Institutional Investor’s 2014 Event-Driven Hedge Fund Manager of the Year award.

After the financial markets collapsed in 2008, the event-driven firm experienced its first down year since its founding in 1988. The firm’s flagship multistrategy Perry Partners International fund dropped 27 percent. The fund quickly rebounded, however, posting 25.2 percent gains in 2009 and 16.21 percent gains in 2010 thanks to credit investments and M&A activity.

Perry worked on Robert Rubin’s legendary proprietary trading desk at Goldman Sachs before founding his own hedge fund firm in 1988. His uncle is James Cayne, former CEO of Bear, Stearns & Co. and his brother, David, founded San Francisco–based TeamCo Advisers, a registered investment adviser, in 2002. Perry qualified for the second 25 of Alpha’s Rich List in 2014, grossing $110 million in earnings the year before. He is an avid democrat, having supported democratic candidate Hillary Clinton in the 2008 U.S. presidential race. Paul Leff, partial owner of National Football League team the Oakland Raiders, stepped down as co-CIO of Perry Capital in early 2014 but remains with the firm as vice chairman. David Russekoff, who became co-CIO in 2012, is now the sole CIO.

Strategy

Perry Capital is an event drive, multi-strategy hedge fund manager. The firm employs opportunistic investing and invests in companies and markets experiencing significant change, real estate and related assets, private equity, illiquid investments and debt securities. Investments are based on fundamental research and analysis.

Funds and Fees Overview

Perry Capital manages the following Funds: Perry Partners LP, Perry Partners International Master LP, Perry Real Estate Fund I, Perry Private Opportunities Fund LP, Perry Private Opportunities Offshore Fund LP and Absolute Return Income Master Fund LP. The Absolute Return Income Master Fund was established July 1, 2013 and while initially funded by senior management, it will be funded by third party investors later in 2013.

Management Fee:	1 percent to 2 percent of net assets per annum
Incentive Fee:	20 percent of net profits

Regulatory Assets Under Management (RAUM)*
Discretionary	$11.61 billion (6 accounts)
Nondiscretionary	$0 (0 accounts)
Total	$11.61 billion (6 accounts)

Employees	96
Clients	1–10 total	33 percent non-U.S.
Fiscal Year Ends	December
All data as of December 31, 2014. *Regulatory Assets Under Management (RAUM) includes no deduction of offsetting liabilities, thus representing gross AUM, not net AUM. RAUM calculations include leverage, proprietary assets and uncalled capital commitments, among other items not required in the calculation of AUM.

Owners and Executives

Paul Leff was promoted from managing partner and co-CIO, positions he held since 1988, to vice chairman effective January 2014.

Name	Position	Position Held Since
Richard Perry	Founder, Sole Director, President, CEO	09/1988
Paul Leff	Vice Chairman	01/2014
Randall Borkenstein	Managing Partner, CFO	07/2002
David Russekoff	Managing Partner, CIO	10/2012
Michael Neus	Managing Partner, General Counsel	01/2010
John McKenna	CCO	01/2010
Todd Westhus	Partner	01/2013
Doreen Mochrie	Partner	01/2013
Himanshu Gulati	Partner	01/2014
Chetan Gulati	Managing Director	01/2014
Nathan Brown	COO Perry Capital UK	01/2014

Financial Detail

Fund Capital ($million) 2013 & 2014

Net Return (%) 2012 & 2013

Perry Capital - Net Return (%) — Perry Capital - Net Return

Hedge Fund 100 Ranking 2002–2014

Perry Capital