Home Business Wall Street moguls get major backing in their fight over hedge fund sales

Wall Street moguls get major backing in their fight over hedge fund sales

Wall Street moguls get major backing in their fight over hedge fund sales

A coterie of high-profile investors, including Pershing Square’s Bill Ackman, Saba Capital Management’s Boaz Weinstein and Avenue Capital Group’s Marc Lasry, are pushing to buy Sculptor Capital, the successor to storied hedge fund Och-Ziff, despite that the fund has already agreed to be sold to another investment firm.

On Thursday they got significant support. Sculptor’s former director and major shareholder, Robert Shafir, told a special committee advising Sculptor’s board that he would not support the deal the company closed in July with real estate investment firm Rithm Capital.

That deal would value the company’s Class A shares at $11.15, about 18 percent more than they were worth on the day it was announced. But the hedge fund’s shares have fallen significantly over a longer period, falling 60 percent in the past two years.

The consortium’s most recent offer for Sculptor, disclosed Wednesday, would value it at about $12.76 for each of its Class A shares.

Sculptor has rejected the consortium’s offer, arguing that it is less certain to close than the Rithm deal.

Shafir, who said he owns 6.2 percent of Sculptor’s class A shares, said in a letter to the special committee that the consortium’s offer is “clearly superior.” He added that “it is not credible to take the position that this group does not have the funds and resources to complete this transaction.”

A key point in any deal will be the future of Sculptor’s management team, including its chief executive, James Levin. Levin had been widely seen as an heir apparent to Daniel Och, a Sculptor co-founder who stepped down as chief executive in 2018, two years after the company agreed to pay a $413 million fine to settle bribery charges. But Och supported Shafir, who was named chief executive in 2018. Levin finally took the reins in April 2021.

The consortium has proposed to replace Levin.

This month, Och joined the chorus of criticism of Sculptor’s deal with Rithm Capital, writing in a letter to the board’s special committee that the deal “substantially undervalues” the company.

Sculptor has said that Och’s criticisms of the deal “are based on distortions and misrepresentations.” The firm maintains that it “carried out a robust sales process supported by world-class legal and financial advisors.”

A Sculptor spokesperson did not immediately respond to a request for comment.


Please enter your comment!
Please enter your name here