Back in 1995, an ex-Bear Stearns risk arbitrage expert Nancy Havens-Hasty launched her own hedge fund called Havens Advisors, and she is its current president. The fund is based in New York City, and as of December 31, 2016, it managed around $193.72 million. Before founding Havens Advisors, Nancy Havens honed her investment acumen at Bear Stearns & Co., Inc., where she was managing trading, capital markets, sales, and research, being the Head of Bankruptcy/High Yield Department, and later on, became the first woman member of the Bear Stearns’ Board of Directors. The beginnings of her career in arbitrage were back in 1978 at Oppenheimer Co. while her Wall Street career started seven years prior, when she landed a job at Kidder, Peabody & Co., Inc., working first as an Associate in the investment-banking department, and later on as a Technology Analyst. She also worked at IBM as a Systems Engineer. Nancy Havens graduated from Cornell University with an A.B. in Physics, and she also earned an M.B.A. with distinction from the Harvard Business School.
Havens Advisors’ employs an event-driven investment strategy, which means it tries to gain profits from the closed mergers, spin-offs, leveraged buyouts, and similar events. It usually exploits bankruptcy and merger arbitrage to make its investments, relying on both in-house and external research. Interestingly, one incident In her career led to her being more cautious than most of the investors. What happened is Ciena Corporation (a company in which Havens Advisors held a considerable stake) gave up on the announced merger with Tellabs, just a few minutes before the shareholder voting, which resulted in a serious financial loss for Havens Advisors. This turned out to be an important lesson about the risks merger arbitrage investment strategy carries, and ever since Nancy Havens has been keeping an eye on her portfolio, following the news connected to her holdings every second the market is open. How cautious she became, best depicts one trade that she performed while riding a bicycle in Italy. Let’s take a look at some of the Havens Advisors’ performance figures and see what has this extremely cautious risk arbitrager managed to achieve in recent years.
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It turns out, for the last couple of years the fund managed to deliver constant positive returns. For example, its Havens Partners, L.P. generated a return of 5.16% in 2013, followed by 2.77% in 2014, and 0.33% in 2015. In 2016, it gained 6.83%, and in 2017, it brought back 2.46%. Last year, through October, Haven Partners, L.P. delivered 2.18%. Its total return amounted to 363.42%, for a compound annual return of 6.97%, while its worst drawdown was 11.63.
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At the end of December 2018, Havens Advisors’ 13F portfolio was valued at $107.78 million, down by 25.33% from one quarter earlier, when it carried a value of $144.35 million. During the quarter the fund dumped 20 companies, while also initiating 16 new positions, after which its portfolio counted around 30 holdings. Among its top stock picks was Twenty-First Century Fox, Inc.(NASDAQ:FOXA), one of the 30 Most Popular Stocks Among Hedge Funds in Q4 of 2018, which, in the meantime, sold the majority of its assets to Walt Disney Co, for around $71 billion. Now, the company is known as Fox Corp. and stays as the corporate spin-off that manages assets that were not included in the deal. Havens Advisors reported a stake in the company at the end of 2018, that counted 173,065 shares with a value of $8.33 million, comprising 7.72% of its 13F portfolio. Over the last six months, Fox Corp's stock lost 17.38%, and on April 22nd, it had a closing price of $37.70. Its market cap is of $23.3 billion and the company is trading at a price-to-earnings ratio of 5.07.
During the last quarter of 2018, Havens Advisors seriously lowered its stake in several companies, among which were NXP Semiconductors N.V. (NASDAQ:NXPI) and Avista Corporation (NYSE:AVA). In NXP Semiconductors, the fund reduced its stake by 93% to 7,900 shares with a value of $579,000, while in Avista Corporation it lowered its position by 76% to 40,000 shares that were worth $1.7 million.
The fund also boosted its stakes in several companies, among which only two weren't sold in the meantime, one of them being Tribune Media Company (NYSE:TRCO). In this company, Havens Advisors raised its stake by 2% to 124,500 shares with a value of $5.65 million.
There were also stocks in the fund's portfolio in which the fund held the same number of shares from the previous quarter, among which the biggest position was in Stewart Information Services Corporation (NYSE:STC). Havens Advisors held 91,000 Stewart Information Services Corporation's shares with a value of $3.77 million, amassing 3.49% of its 13F portfolio.
Click here to read the rest of the article where we discuss Havens Advisors' top new and old positions.
This article was originally published at Insider Monkey.