By Svea Herbst-Bayliss
BOSTON, July 12 Ospraie Management partner Will
Snellings, who specializes in picking stocks at the $1 billion
commodities-oriented firm, is launching his own hedge fund with
the blessing of his boss, Dwight Anderson.
Snellings, a six-year Ospraie veteran, will start to accept
money from outside investors for his Marianas Fund this month,
according to a presentation obtained by Reuters.
The minimum investment is $1 million, standard for many
Since March 2012, Snellings has run a long/short equities
and commodities portfolio at Ospraie.
That portfolio, the Marianas Strategy Program, returned
roughly 17 percent last year and is up 8.12 percent this year,
outpacing the average hedge fund's 3.6 percent gain in the first
half. The broader Standard & Poor's 500 index gained 12.6
percent. At the end of April Marianas has $37 million in assets,
according to the prospectus.
Now it will be part of Marianas Fund Management which will
remain, for a time, an affiliate of Ospraie. A spokesman for
Ospraie declined to comment. Snellings could not be reached.
With growing fears that the Federal Reserve's easy money
policy will eventually end and make bond investments less
attractive, industry analysts expect hedge funds specializing in
so-called long/short equity strategies to see a flood of new
money in the second half of the year.
Snellings' split from Ospraie is being cast as a carve out
which is being called amicable, according to a personal familiar
with the firm. Anderson will be writing his partner the biggest
check he has ever handed to a new manager.
The two men will continue to work in the same Manhattan
office building and Marianas will have full use of Ospraie's
infrastructure and resources, the prospectus says.
Laying out his investment strategy, Snellings said he will
make roughly 15 to 20 bets on "great businesses" in low and
higher risk industries. Those will be balanced out with as many
as 25 short positions, or bets against "high risk, really bad
businesses." A small portion of the portfolio, about 8 percent,
will be allocated to long or short commodity investments, the
As the $2.25 trillion hedge fund industry matures, ever more
managers are spinning out of established funds, often with
financial support of their former bosses.
In April, Michael Pausic announced plans to leave Maverick
Capital and open his own fund while Scott Ferguson left Pershing
Square Capital Management last year to launch his own business.
Also last year, John Duryea left Ospraie to start private equity
firm Blue Road Capital.
In the prospectus, Snellings, who earned an undergraduate
degree from the University of North Carolina and an MBA from the
University of Virginia, said he will charge a 1.5 percent
management fee and a 20 percent performance fee, again fairly
standard in the hedge fund industry. Investors will be permitted
to get their money back four times a year after giving the fund
60 days notice.
Snellings wrote in the prospectus being sent to potential
investors that "fund investments will be made as if they are our
personal investments," and added "we will never cut corners on
ethics or compliance."