Canaccord’s Eric Rosenfeld and SPACs
So Eric Rosenfeld, a US hedge fund manager who likes to put his money in Canada, is back in the middle of things. I was curious about what he was doing. In the last 20 years or so, he has been an activist in a lot of Canadian stocks, but in the last few years he has been less vocal.
But he recently asked for a place on the board of Canaccord Genuity and got it. He owns shares worth about $11 million. It sounds like their big wealth management unit in the UK could be up for sale.
Eric’s company, Crescendo Advisors, has $25 million in private funds, according to the last SEC filing I could find. I thought he would be a lot bigger. At its peak, Crescendo’s AUM was $350 million. His strange way of doing things might also explain why each of his funds is set up to make money off of a single idea (rather than a portfolio of ideas).
During the 2008 financial crisis, he bought 8% of the company Cott, which makes drinks and is now called Primo Water, for less than $3 (the current price is $20). This was a great investment for him. I think Crescendo’s long-term record is somewhere in the low double digits.
There are two Eric Rosenfelds who run hedge funds. The other Eric was a big part of what caused LTCM to fail. Google is wrong here. This is the picture of Eric Rosenfeld from Crescendo, but the profile is wrong in other ways. Eric Rosenfeld could only get an MBA from Harvard. Eric was in charge of arbitrage trading for Oppenheimer before Crescendo (eventually, CIBC Oppenheimer).
Eric and I once worked for the same company, BCE Emergis, where he was an activist and my employer and I were shareholders. During this time, I thought everyone else knew everything, so I reached out to him and he agreed to meet.
After having a quick hot dog lunch on the street with my boss, I met him in the lobby of the Royal York. At the start of the meeting, these two millionaires talked about the best things about street hot dogs. My line of questioning was about how quickly he could sell BCE Emergis for parts, but activists always like to say that they have a long-term plan with many different parts. In the case of BCE Emergis, this was kind of true, because it took 3 years to sell the company.
Eric was one of the first people to work in a field that is now very popular: publicly-listed blank check companies, which are now called SPACs. He has started a few of them. The first one was Arpeggio Acquisition Corp., which changed its name to Hill International.
At the time of the deal, it was worth $113m. After 15 years, the company is now worth $85 million. I’m sorry to say this, but most of his SPACs haven’t done well over time.
When you meet someone for the first time, you think you know them, but I never would have guessed that Eric wrote a book for kids called Mrs. Buttkiss and the Big Surprise. The main plot is about a big woman trying to hold in her gas. Continuing. He is part of the Columbia Business School crew (old school, cheapness focused value investing).
I can’t say anything about Eric’s past investments or his business sense. Instead, I’ll let this video, which is a song called “Stupid Callous Fragile Ego Execs with Halitosis,” speak for itself.
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