11/08/2010 Author: Elana Margulies

Praesidium grows fund from managed account

Praesidium Investment Management Company, a New York-based value-oriented investment firm, has launched a fund after running the strategy via managed accounts since March 2008.

The Praesidium Strategies Opportunities Fund, which runs along side the managed accounts, debuted 1 August and employs a private enterprise approach to public company investing. It invests in businesses trading at a material discount to their underlying intrinsic values, based on the firm’s assessment of the discretionary free cash flow the company will generate over time. It is a concentrated long-only fund with 13-15 positions.

Michael Ware, senior analyst, said Praesidium decided to debut a fund structure to allow for interest from certain types of investors.

“It is a vehicle that for the first time will allow us to accommodate wealthy individuals and smaller institutions,” he said.
Kevin Oram and Peter Uddo co-founded Praesidium. Previously, Oram worked at Sanford Bernstein from 1991 to 2003, Uddo previously worked at Viking Global Investors from its inception in 1998 to 2003.

The fund has a $500,000 investment minimum, no lock-up and monthly liquidity with 45 days’ notice. There is a 1% management fee and a split 60% absolute and 40% relative incentive fee. Goldman Sachs is the prime broker.
The managed account strategy is down 6.3% YTD through end of June. Last year, it was up 59.5% and in 2008, it was down 16.5%. From its March 2008 inception through end June, it is up 24.8% relative to the S&P 500, which is down 18.23%.