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Morning Brief: Soroban to Shut Its Master Fund

The hedge fund firm will focus on its concentrated fund as co-founder Gaurav Kapadia leaves to start a family office.

Soroban Capital Partners is shutting down the Soroban Master Fund, its oldest fund, and will only emphasize Soroban Opportunities, its concentrated fund, according to Bloomberg. The move will slash total assets from roughly $10 billion to about $6 billion. In addition, Eric Mandelblatt, who co-founded the firm, will remain at Soroban, while co-founder Gaurav Kapadia is leaving to start a family office, according to the report. The Soroban Master Fund, which managed about $4.1 billion, generated a 13 percent annualized return since inception, in line with the Standard & Poor’s 500 Stock Index.

Last year the Master Fund gained 11 percent, according to an earlier Wall Street Journal report. This was its best year in the past three. According to a database obtained by Alpha, the fund gained 4.67 percent in 2016 and lost 1.28 percent in 2015. It had risen by double-digits in each of the three years prior to that, including more than 38 percent in 2013, according to the database.

Mandelblatt and Kapadia launched Soroban after leaving TPG-Axon Capital Management. “While we will be sacrificing the economic benefits to Soroban associated with greater assets under management, our bet is that these changes will facilitate better investment returns over the long run,” Mandelblatt reportedly wrote in a letter to clients. “This is a sensible trade-off for our firm as we, partners and employees, are collectively the largest investor today.” The $6 billion Soroban Opportunities Fund will hold 10 to 20 positions. Of that sum, roughly 10 to 15 will be longs and as many as 10 will be shorts. Opportunities was launched in August 2014 and gained 24 percent last year, according to an earlier report in The Journal. According to Bloomberg, investors in the Master Fund will receive at least three-quarters of their capital by the end of June while the rest will be returned no later than year-end.


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