| Larry Robbins (Bloomberg) |
Larry Robbins’s Glenview Capital Management is closing its Glenview Capital flagship funds to new inflows at the end of the year, according to the hedge fund firm’s first-quarter letter, obtained by Alpha.
As we earlier reported, the New York hedge fund firm in early 2014 closed the Glenview Opportunity funds to new money.
“We are sensitive to the balance between asset size, which funds our significant investment team and allows us a greater share of voice as significant shareholders, and liquidity, which allows for more efficient entry and exit surrounding individual positions,” Robbins wrote in the letter.
As of March 31, the Glenview Capital funds — onshore and offshore — had $8 billion under management, while the Opportunity funds had $3.6 billion.
The letter also pointed out that the Glenview Offshore Opportunity Fund was up 6.9 percent net in the first quarter, while the domestic version rose 7.32 percent.
In discussing the closure of the flagship funds, Robbins pointed out that the firm has experienced “significant organic growth” and “modest” fresh capital inflows over the past several years.
“While we are confident in our ability to manage a larger asset base, we believe that organic growth will be sufficient to achieve our investment and talent objectives in Glenview and GO [Glenview Opportunity] in 2016 and beyond,” he said. “To the extent we see tactical opportunities develop in the marketplace, we may revisit these intentions in the future.”
Last year the Glenview Capital funds rose more than 14 percent, and the Opportunity funds grew about 25 percent. In 2013 the flagship funds advanced 44.29 percent, while the Opportunity funds surged 101.74 percent.
In those two years combined, Robbins personally earned more than $1.3 billion, ranking No. 7 on the Rich List last year and No. 8 in 2013.
In the letter, Robbins pointed out that in the first quarter the Opportunity funds’ equity long portfolios were up between 9.7 percent and 10.2 percent.
Gains were heavily driven by health care, which kicked in 8.5 percent to gross returns. The top five winners for the quarter were Thermo Fisher Scientific, Endo International, Flextronics, Anthem Inc. and Humana.
The gains were offset by a 3 percent loss in the short portfolio.
The Opportunity funds’ long credit portfolio was barely profitable, while the short portfolio lost nearly 2 percent.
Robbins told clients he believed the risk that the financial system will crash has returned to normal “and there are few signs of stress in sovereign, corporate or overnight spreads.” And although there are risks related to oil and emerging-markets volatility, and that debt-to-gross domestic product “has significantly elevated” in developed economies over the past decade, “there do not appear to be imminent signs of financial collapse.”
On the economy, Robbins said his firm sees “reasonable support for solid economic growth, modest wage inflation and intermediate stability.”
And while he acknowledged that stock market valuations have clearly gone from great to good, “the overall environment remains constructive with the forces of convergence omnipresent.” He pointed to what he deems a stable systemic and economic backdrop combined with cooperative debt markets and strong owner engagement. “These factors embolden our focus on ‘convertible equities’ as the odds of constructive actions by boards remains high,” he added.
