Philippe Jabre Interview: Columbia Business School's Graham & Doddsville

Columbia Business School is out with the Spring 2014 issue of its Graham & Doddsville newsletter.  In it, they interview Philippe Jabre of Jabre Capital as well as Arnold Van Den Berg and Jim Brilliant of Century Management.  It also profiles H. Kevin Byun of Denali Investors and Eric Rosenfeld of Crescendo Partners.

Additionally, pitches from the Pershing Square Challenge are presented.  MBA students presented longs of Allegion (ALLE), Carnival (CCL), Clean Harbors (CLH), Naspers (JSE:NPN) and a short of Cablevision (CVC).

The full issue is below, but here's some select quotes from Jabre's interview:

Jabre talks about starting his own firm and notes that,

"Before you start a  hedge fund you have to  follow the right steps. I  always tell people it's the  same as if you are a doctor,  architect, or lawyer opening  a practice. I first joined a  bank, then after ten years I  joined Lehman Brothers.  Then, with a group of four  partners, we spun off from  Lehman Brothers and  created GLG. And then  after that, I created my own  fund. You follow the steps  so people will follow you.    I remember after business  school I wanted to create  my own fund at age 25. My  father told me if you want  to lose money, go lose  money at other people's  expense. You can't become  a fund manager unless  you’ve lost a lot of money  and survived. So JabCap was  a normal evolution when I  started it seven years ago. A  lot of clients followed  because I had a very good  track record at my prior  funds over the previous  fifteen years and that made  it easier. But you need a  track record and you need  to have clients. The barriers  to entry are very high today  and what people look for is  a track record and the  experience of managing  money unsupervised. And  that's a very difficult concept that you learn with time."


Jabre on opportunities: "So the key thing is to find  things that have done nothing for ages and  suddenly there is an event  that you need to be the first  to understand or appreciate.  And this is where you have a huge opportunity to outperform."


Embedded below is the Spring 2014 issue of CBS' Graham & Doddsville newsletter:



For more from Columbia Business School, be sure to check out their interview with Maverick Capital's Lee Ainslie in a previous issue as well as their interview with Li Lu.

H. Kevin Byun's Denali Investors: First Quarter Investor Letter

We've been awaiting various first quarter 2010 letters from hedge funds and various other managers as some of them are slowly starting to trickle in. So today, we wanted to share with you H. Kevin Byun's latest letter from Denali Investors. Since inception, Denali is up 62.5% compared to -20.1% for the S&P 500. For March, Denali was up 3.0%, lagging the S&P. You can check out how their performance stacks up against other managers in our round-up of 2010 hedge fund performance numbers. And as always, you can check in on our coverage of hedge fund letters here.

Right off the bat in his letter, Byun makes a very good point that by and large, at least some of this never-ending rally in stocks can be attributed to performance chasing as many funds struggle to cope with their highwater marks and try to recoup fees where they can. As he writes, "And so career risk, business risk, and behavioral finance, rather than the best interests of their investors, comes to the fore." He hopes that many fund managers aren't simply wishing for a full recovery of assets, but that very well may be the case here.

Turning to Denali's portfolio, we see that they are eyeing opportunities in spin-offs and corporate liquidations. Byun made a fantastic point that Warren Buffett was able to outperform even in market declines due to his special situation investments. As such, Byun likes to have a few positions that fit this mold and have solid risk/reward profiles.

Embedded below is Denali Investors first quarter 2010 letter to investors:



You can download a .pdf here.

More than anything, this letter is a good look into a methodical framework for a value oriented investment strategy. While he doesn't specifically name fund positions, we still found the letter intriguing. If you have access to any hedge fund investor letters, we'd love to hear from you as we're always looking to share resources anonymously as your privacy is our top concern. Send us a message.

And in the mean time, you can sort through previous hedge fund letters we've posted.