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Aristeia Capital Management Returns, AUM, and Holdings

Liliana De la Torre

Aristeia Capital LLC is a global investment manager based in Greenwich, Connecticut, and New York City. It generally invests in the public equity and fixed income markets. This private hedge fund was created in 1997 by Robert Henry Lynch alongside Anthony Michael Frascella and Kevin Christopher Toner. Currently, the firm is run by Robert Henry Lynch who is also its Chief Security Officer. Lynch graduated Magna Cum Laude from Cornell University where he also earned an MBA. Before launching Aristeia Capital, Lynch worked as an analyst at Delaware Bay Co.

The second Founding Partner of Aristeia Capital, Anthony Michael Frascella is the current Chief Investment Officer. He holds a Bachelor of Science in Economics from the Wharton School of Business at the University of Pennsylvania. After graduating, Frascella started working at UBS Securities where he achieved the position of Vice President. Kevin Christopher Toner serves as Principal of Aristeia Capital. He graduated from Columbia University with a BA in Economics. Toner's professional experience includes working as Managing Director at UBS Securities. He also served as Director of EMCOR Group Inc. and as a member of the New York Stock Exchange.

Anthony Frascella Aristeia Capital

Aristeia Capital specializes in investment management for pooled investment vehicles. It executes a combination of quantitative and fundamental strategies to find investment opportunities across the capital structure. All this while using a bottom-up investment approach. The fund generally centers on long-term investments, but it often takes advantage of short-term trading opportunities whenever pricing anomalies are perceived.

As an example, we can take a look at the performance of its credit fund Aristeia Partners LP. Over the last five years it has achieved some positive results and has found the way to recover from a few setbacks. In 2013 its fund attained an annual return of 15.53%. However, 2014 and 2015 were down years for Aristeia Partners; it lost 3.11% and 7.20% respectively. The fund recovered in 2016 when it attained an annual return of 13.94 %. The positive results continued in 2017 although it achieved a lower return than the previous year, 5.06%. Through October 29th, 2018 the fund had delivered returns of 6.15%, giving it to a total return of 828.16% with a compound annual return of 11.1% while its worst drawdown was at 29.22. Aristeia Capital reported on its Form ADV submitted on March 28th, 2018 to hold $5.89 billion in assets under management on a discretionary basis.

At the end of the third quarter of 2018, Aristeia Capital's portfolio was valued at $2.33 billion. As of September 30th, the fund's most significant position was in Altaba Inc (NASDAQ:AABA), with 14,121,127 shares worth $961.93 million. This stock represents 41.34% of the fund's portfolio value. Altaba Inc is an investment firm that resulted from Verizon's purchase of Yahoo Inc, and it's among the 30 most popular stocks among hedge funds in Q3 of 2018. Find out more about the changes made to Aristeia Capital's equity portfolio this Q3 of 2018 on the next page.

Aristeia Capital's second largest stake was in Iacteractive Corp (NASDAQ:IAC) where the fund acquired 1,383,430 shares worth $299.82 million. IAC is a media and internet company which owns more than 150 brands related to dating, entertainment and more. Also in Q3 2018, the fund opted for adding 18 positions to its portfolio. The largest acquisition was in Seadrill LTD (NYSE:SDRL) where the fund purchased 5,584,341 shares valued at $138.38 million. Seadrill is a deepwater drilling company that operates worldwide providing services mainly to the petroleum industry. Another substantial investment was made in Fortive Corp (NYSE:FTV) purchasing 1,519,455 shares worth $127.94 million. Fortive is a conglomerate of 20 companies dedicated to industrial technologies.

Aristeia Capital seemed to have lost interest in several of its positions. It decreased its stake in 14 of them significantly. A considerable reduction was made to its holdings in Akamai Technologies (NASDAQ:AKAM) where it lowered its investment by 97% holding now 3,611 shares worth $264,000. Another remarkable reduction can be noticed in its stake in Herbalife Nutrition LTD (NYSE:HLF) decreased by 94% to 21,436 shares worth a value of $1.17 million.

The fund decided to say goodbye to 21 of its positions this Q3 2018. For instance, it sold the total of its stake at Avaya Holdings Corp (NYSE:AVYA) in which previously held 146 000 shares with a value of $2.93 million and MDC Partners Inc (NASDAQ:MDCA) dumping its 136,100 shares valued at $626 000.

Disclosure: None

This article was originally published at Insider Monkey.