HoldCo Targets Underperforming US Banks
- Okay, here's a breakdown of the key data about HoldCo and its founders, Ghei and Zaitzeff, based on the provided text:
- * Formation: Founded in 2011, starting with "crummy offices" in New York's Financial District.
- Zaitzeff is a Brown University computer science graduate who specialized in modeling subprime CDOs.
Okay, here’s a breakdown of the key data about HoldCo and its founders, Ghei and Zaitzeff, based on the provided text:
HoldCo & Its Founders:
* Founders: samir Ghei and Ilya Zaitzeff. They met at Tricadia Capital,another hedge fund.
* Formation: Founded in 2011, starting with ”crummy offices” in New York’s Financial District. The name “HoldCo” came from thier initial strategy of acquiring debt from failed holding companies.
* Relationship: They are described as close friends who spent a critically important amount of time (14 years) working together, frequently enough to the frustration of their wives. They emphasize a collaborative, non-personal approach to investment debates.
* Investment Style: “Go-anywhere” – they seek out distressed debt and situations were they believe the market is mispricing risk. They are described as “scrappy fighters.”
Early Career & Strategy:
* Backgrounds: Ghei previously worked at Goldman Sachs. Zaitzeff is a Brown University computer science graduate who specialized in modeling subprime CDOs.
* Subprime CDOs: Both had experience with subprime collateralized debt obligations (CDOs) – even profiting from both creating them and betting against them (like those described in “The Big Short”).
* Early success: They initially focused on bonds from failed banks, believing assets like tax refunds were undervalued. They successfully fought the FDIC in court to claim these assets.
* Fundraising: Started with a single endowment investment in 2013, and grew to manage funds from about 20 universities, hospitals, and family offices.
Notable Investments & Actions:
* First NBC Bank (New Orleans): In 2016,they invested in the distressed debt of First NBC Bank,a bank established to help rebuild New Orleans after hurricane Katrina.
* Shorting & Exposing First NBC: They shorted the bank (bet against it) after realizing it was undercapitalized and publicly revealed their concerns. This led to the auditor resigning and the FDIC seizing the bank.
* First NBC Outcome: The former CEO of First NBC, Ashton Ryan, was sentenced to 14 years in prison for bank fraud in 2023.
* View of Bank Management: Their experiences, like the First NBC situation, reinforced their skepticism about bank management.
In essence, holdco is a hedge fund built on identifying and capitalizing on distress, notably in the financial sector, with a willingness to challenge established institutions and a strong belief in their own analytical abilities.