Pirate Captain Sorry For Sunken Treasures

Things haven’t been shipshape at Pirate Capital this summer. Some sweet-sounding investments turned sour for the Norwalk, Conn.-based hedge fund. For that poor investment navigation, manager Thomas Hudson Jr. has apologized and has promised to do better. In a letter to investors last week, according to TheStreet.com, Hudson wrote that Pirate “undertook a firm-wide review” of its “trading strategy, core and non-core investments, risk controls and hedging strategies” with the hope that the firm “will now be even more selective when entering new positions and will cut losing positions more quickly.” Hudson’s “shipwrecks” include GenCorp, James River Coal, Cendant and OSI Restaurant Partners. It all sounds worse than it really is, especially given uneven industry performance so far this year; Hudson noted that its four funds year to date range from +3.2% to -2%, having recovered some recently following deeper doldrums, but that’s oceans apart from its historical average annual return of 28% from, say, 2002. Pirate seems already to be keeping its word about losing positions; it just jumped ship from OSI, selling off its stock and ending a potential proxy contest. The New York Post reports that Hudson is planning on closing the $1.7 billion fund once it hits $2 billion.