Cornwall Capital

Cornwall Capital is a New York City based private financial investment corporation.[2] It was founded in 2003 by Jamie Mai, President and Chief Investment Officer, under the guidance of his father, Vincent Mai, who ran the private equity firm AEA Investors, one of the oldest leveraged buyout firms in the United States.[1][3][4] It was profiled in the book The Big Short by Michael Lewis as one of a handful of investors in the world that correctly foresaw and profited from the subprime mortgage crisis of 2007.[5] In addition, James Mai’s investment strategy was portrayed by Jack D. Schwager in the book Hedge Fund Market Wizards (2012), an inside analysis of the world's greatest hedge fund experts and the strategies that they implement.[1] They were featured in the film adaptation of The Big Short, fictionalized with the names Charlie Geller, Jamie Shipley and Ben Rickert (played by John Magaro, Finn Wittrock and Brad Pitt). This has resulted in them being widely known for their investments running up to the financial crash in 2007-8.[6]

Cornwall Capital
Private company
IndustryInvestment
Founded2003
FounderJamie Mai[1]
Headquarters
New York, New York[1]
,
United States
Area served
Global
Key people
Ben Hockett, Partner
JC de Swaan, Partner
Ian Haft, Partner
Websitecornwallcapital.com

History

The firm started as a family office to diversify the capital of James Mai’s father.[1] Soon after Cornwall's inception, Charlie Ledley, a former private equity colleague, joined the firm. In 2005, Ben Hockett joined as head trader, bringing extensive knowledge of capital markets, derivatives, and fixed income trading.[1] Charlie Ledley left Cornwall in 2009 to join a large Boston-based hedge fund.[1] Ben Hockett has remained at the firm as the head trader and chief risk officer. Other senior members include partners JC de Swaan and Ian Haft.[7][8]

Cornwall seeks highly asymmetric investments, in which the upside potential significantly exceeds the downside risk, across a broad spectrum of strategies ranging from trades that seek to benefit from market inefficiencies to thematic fundamental trades. The firm has produced an average annual compounded net return of 40 percent (52 percent gross).[1]

Cornwall Capital was one of a few investors who saw and shorted the subprime mortgage crisis market prior to the 2007 collapse; according to Michael Lewis, they were perhaps one out of 20 in the world who did so.[5][9] This particular trade generated 80 times the initial premium (investment).[1] The founders of Cornwall Capital started a hedge fund in their garage with $110,000 and built it into $120 million when the market crashed.

Cornwall Capital was reported to have become in 2013 the largest shareholder of American Pacific Corporation, a NASDAQ listed US company, with close to 15% of the outstanding stock.[10] American Pacific Corporation agreed to nominate Ian Haft for election to its board of directors in order to resolve a potential proxy contest.[11] The company was sold to H.I.G. Capital in January 2014.[12]

James Mai decided to open up the fund to a few like-minded investors with whom he could be transparent and share ideas, starting in May 2011.[1]

Notes
  1. Jack D. Schwager.Hedge Fund Market Wizards, John Wiley & Sons, 2012. ISBN 978-1-118-27304-3
  2. Cornwall Capital, official website.
  3. All geek to them: A handful of outsiders come out of the crisis in credit, The Economist, Mar 18th 2010.
  4. Hardy Green. "Michael Lewis’ Big Short an unsettling experience". Reuters, March 11, 2010.
  5. Michael Lewis. The Big Short, W. W. Norton, 2010. ISBN 978-0-393-07223-5
  6. Truffaut-Wong, Olivia. "Where Are Jamie & Charlie From 'The Big Short' Now? They've Come A Long Way". Bustle.
  7. "Jean-Christophe de Swaan". Princeton University. Retrieved April 11, 2014.
  8. "American Pacific Corporation, 2013 Schedule 14A Proxy Statement". American Pacific Corporation. Retrieved April 10, 2014.
  9. "Interview with Michael Lewis". Archived from the original on July 21, 2010. Transcript of interview with Michael Lewis, included in the Audio version of The Big Short.
  10. "AMERICAN PACIFIC CORP Form SC 13D/A". American Public Media Marketplace. January 14, 2013.
  11. "American Pacific Announces New Director Nominee and Agreement With Stockholder Cornwall Capital". The Wall Street Journal. January 14, 2013.
  12. Lauren Pollock (January 10, 2014). "HIG Capital to Acquire American Pacific for About $392 Million". The Wall Street Journal.
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