April 3, 2013 / 11:51 PM / in 5 years

Maverick Capital partner Michael Pausic to launch own firm

BOSTON, April 3 (Reuters) - Maverick Capital’s Michael Pausic, who oversees media and telecommunications investments at the $9 billion hedge fund, will be starting his own hedge fund, two people familiar with the matter said.

Pausic, who joined Maverick in 1997, four years after Lee Ainslie founded the firm in 1993, has wanted to branch out beyond media and telecommunications for some time and will receive a significant investment from Maverick’s partners to launch his own firm, one of the two people familiar with the matter said.

Pausic and Ainslie, who got his start at Julian Robertson’s Tiger Management, have been friends since their college days at the University of Virginia. Pausic has moved back to Charlottesville, Virginia, to set up the firm.

He has been mulling the move for about a year and will resign his partnership at Maverick, but he is expected to keep close ties to the firm, one of the sources said.

Maverick employees were told about the move this week and top investors are being notified now.

Maverick currently has 14 partners, including Pausic, and the firm has long had a low turnover rate. But as the hedge fund industry matures a number of partners at established firms have been spinning out in recent months, often with the blessing and financial support of their former bosses.

A spokesman for Maverick declined to comment on the move and declined to make Pausic available.

Pausic’s decision to set out on his own follows the departure of two other Maverick partners, Steve Galbraith and Gunnar Overstrom, in 2012.

Maverick’s performance rebounded dramatically in 2012, when it beat many rivals with a 15.5 percent return, from 2011, when it had heavy losses. This year the firm’s main fund is up 1.5 percent for the first quarter.

Starting a hedge fund remains very popular, with some 1,108 new funds launched last year, according to Hedge Fund Research. But keeping them open is tough: some 873 funds shut down in 2012 as it becomes ever tougher to raise capital and deliver the kind of returns investors want to see.

Former Maverick partner Overstrom is currently shopping his new fund Three Corner Global to potential investors with an expected launch date this quarter, according to a person who has seen the investor presentation.

The firm will select stocks and make corporate credit investments from time to time. It plans to have as many as 40 long positions and as many as 50 short positions and Overstrom expects that the team’s ideas will target a 20 percent annual return, according to the investor presentation.

Investors will be expected to put in at least $5 million each and the firm will use Goldman Sachs and Credit Suisse as prime brokers. A representative for the fund could not be immediately reached.

Overstrom, who is heading the firm, hired Jeffrey Eisenstein, a former principal at TPG Axon, as a partner and director of research. John Nesbitt left Maverick to join Three Corner Global as a senior analyst.

The sources for this story did not want to be named because they were not authorized to talk to the media.

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