Centaurus Capital | Bernard Opetit | Hedge Fund Notes

Centaurus Capital

Centaurus Capital | Hedge Fund Notes


Centaurus Capital Hedge FundThe following piece on Centaurus Capital is being published as part of our daily effort to track hedge funds in the industry. To review other hedge fund research notes please see our Hedge Fund Tracker Tool.
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Resource #1: (3.13.09) Hedge fund Centaurus Capital has lowered its stake in Dutch semiconductor equipment maker ASM International (ASMI.AS) to less than 5 percent, filings with the Dutch market regulator AFM showed on Saturday.

A filing dated March 11 showed the fund's stake in ASMI amounted to 4.95 percent. In a previous filing made with the AFM in April 2008, Centaurus Capital held 7.22 percent in the chip equipment maker. source

Resource #2: (12.8.08) Hedge Fund Firm Centaurus is considering selling its remaining 6.66 percent stake in French IT services group Atos Origin (ATOS.PA) due to the financial crisis, French daily La Tribune reported on Monday.

Centaurus and Atos could not be immediately reached for comment.

According to La Tribune, Centaurus could sell its stake to PAI Partners, which is the group's main shareholder with a 22.61 percent stake, and thereby relinquish its supervisory board seat. source

Resource #3: Hedge fund Centaurus Capital is to wind down its flagship $1.2 billion Alpha fund and launch new funds after investors rejected a plan to restructure the portfolio, a source close to the company told Reuters.

Centaurus had proposed the event-driven fund -- down about 25 percent in the 10 months to end-October -- give investors back about 30 percent of their cash, and change its strategy to more lucrative areas of opportunity such as distressed credit.

Investors rejected the plan, which required more than 50 percent backing, and Centaurus will now impose a temporary gate to limit outflows, and give investors their money back as soon as possible, the source said.

The company plans to launch a distressed debt fund and expand its Asia fund, and may launch further strategies. source

Resource #4 Arnold, 33, runs Centaurus Energy LP, a hedge fund that trades energy products out of Houston, Texas. This year he was the youngest person to join the ranks of the Forbes list of 400 richest Americans as #317 with an estimated his net worth of $1.5 billion. Trader Monthly on the other hand, estimated his income from 2006 alone to be between $1.5 –$2 billion, making him the highest paid hedge fund manager of last year, ahead of big names like Eddie Lampert and Stevie Cohen.

Before Centaurus Energy, Arnold, a Vanderbilt alum, was a natural gas trader for Enron. He is credited with making $750 million for Enron trading natural gas in 2001, of which he was awarded $8 million for a bonus. After the Enron crash, he founded Centaurus in 2002 with his $8 million bonus and outside investment. The fund currently has more than $3 billion in assets under management and with its 3-and-30 fee structure (3% management fee and 30% of profits), it’s understandable how Arnold makes his money. source

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Most traders regard late August as a time to take a breather. Not John Arnold. The 32-year-old head of Houston hedge fund Centaurus Energy had just laid waste to Bo Collins’s MotherRock, squeezing the New York fund caught on the wrong end of a long natural-gas position.

That was just an appetizer. Next in his sights: Amaranth’s Brian Hunter. The Calgary-based gunslinger was fresh off an amazing year in which he created an estimated $800 million in profits for his Greenwich, Connecticut, employers, earning himself some $100 million in the process. Nothing seemed to sate Hunter’s appetite for betting on natural gas, his bias heading into September’s peak hurricane season as long as the Western Canadian horizon on a clear day.

Was he overzealous—or just crazy? As one veteran natural-gas trader put it: “The guy really tried to keep the market up—he was out of control. He didn’t hide anything. Everyone, and I mean everyone, knew his position.” source

Resource #6: John D. Arnold runs Centaurus Energy Advisors, LLC, a Houston, Texas based hedge fund that specializes in trading energy products. After graduating from Vanderbilt University he began his career as a trader at Enron. After initially working on the Crude Oil desk, John moved over to the Natural Gas Desk upon the departure of Jeff Bussan. Using their new Internet-based trading network, EnronOnline, he is credited with making three quarters of a billion dollars for Enron in 2001 and was rewarded with an $8 million bonus.[1]

According to Arnold, “After Enron collapsed, there was a general revaluation of credit risk among energy companies. The better credits were less willing to take on the lesser credits as counterparties. So the lesser credits found themselves with fewer counterparties willing to trade with them, even though they still needed to hedge the pricing risks in their business. Hedge funds previously had not been involved in the over-the-counter market, except for the very largest, because the other participants were reluctant to grant credit to that type of entity.”
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