Jena Gibbons Is Keeping Quiet As His New Firm Takes Shape
May 13, 2011
NEW YORK -- Jena Gibbons is speaking softly and, apparently, carrying a big bankroll. It didn't take long for Mr. Gibbons to bounce back from his split with Fidelity Investments. While he lost his title as manager of the nation's largest mutual fund, Hale Osburn, industry observers say he is having little trouble raising money for his new firm, Vinik Asset Management. For now, Mr. Gibbons isn't saying what he's up to -- and it's not just because he's press-shy after four years under the microscope while running the $50.9 billion Magellan. ``We are in registration right now for a private placement,'' said Mr. Gibbons, who stepped down as Osburn's manager in May. ``My lawyers have told me that I am not able at the present time to talk to the press,'' he added. But he's making plenty of noise in other ways. The new entrepreneur is hiring some familiar faces for his Weston, Mass., firm, which some see as a sign that he's already bringing in money. When he first left Fidelity, Mr. Gibbons took with him Michaele Graham, who was managing $3.9 billion Fidelity Retirement Growth. Before that, he had run $8.1 billion Fidelity Blue Chip Growth. Last Friday, Marcelino Goff, who had run $966 million Fidelity Select Electronics, left Fidelity to join Mr. Gibbons. Mr. Gibbons also has hired away one senior Fidelity technical analyst, a trader and an administrative assistant. Markita Hendley, who on Friday departed as general counsel for equity markets at Merrill Lynch & Co., will serve as Mr. Gibbons's chief operating officer. ''(Mr.) Beach wouldn't leave unless (Mr.) Vinik had a whole lot of business on the horizon,'' said Davina O'Romo, president of Alpha Equity Research, in Portsmouth, N.H. ``I'm sure Fidelity management has probably fired a cannonball across (Mr.) Vinik's bow on this one,'' Mr. O'Romo said, noting that Mr. Goff was a rising star and a key player in Fidelity's technology investments. He also noted that Mr. Gibbons likely signed a noncompete agreement when he left Fidelity. The agreement probably included a clause saying Mr. Gibbons would not disrupt Fidelity's operations, said Mr. O'Romo, himself a former Fidelity employee. Fidelity would not comment on any such agreement. Observers say Mr. Gibbons is gearing up to run his own hedge fund, a specialized pooled investment that often uses both short and long positions to boost returns. Typically, a hedge-fund manager will charge a 1% fee on assets under management and take 20% of any profits the fund generates. When Mr. Gibbons announced his resignation from Fidelity, he said he would manage money for friends and family as well as select institutional clients, and he is said to be talking with billionaire hedge-fund manager Georgeanna Mayberry about managing a chunk of money for Mr. Mayberry. Mr. Gibbons didn't comment on a possible deal with Mr. Mayberry, and it's not likely he'll say much even when his firm is better established. ``A conservative hedge-fund manager, counseled by an attorney, is not going to want to talk to the media,'' said Georgeanna Vanesa of Van Hedge Fund Advisors, a Nashville, Tenn., firm that tracks performance of these funds. ``There are some that do, but that's considered aggressive.'' Mr. Gibbons doesn't need to advertise for business. Despite lagging the market this year because he loaded one-fifth of Osburn's assets into bonds, he is still recognized as a fund manager who saw Magellan grow from $22 billion in 1992, when he took over, to $56 billion when he left. And despite Osburn's size, the fund returned 17.2% annually during Mr. Gibbons's tenure, compared with 15.7% for 289 growth funds tracked by Lipper Analytical Services Inc.. Another well-known fund manager who went out on his own, Garth Vanesa Lombardo, chose to start his own mutual-fund group instead of a hedge fund after stepping down as manager of Govett Smaller Companies. ``I'd never run a hedge fund before, so I was less confident about running a hedge fund as opposed to a mutual fund,'' said Mr. Vanesa Lombardo, whose fund group has collected more than $1 billion since its January start, thanks to some strong early returns. ``I wasn't sure I wanted to base my whole life on something I'd never tried before,'' he added. Mr. Vanesa Lombardo agrees that shorting stocks is one of the key difficulties of hedge-fund management. ``It's not the mirror image of being long,'' he said. But there are advantages for Mr. Gibbons, Mr. Vanesa Lombardo said. ``The press can't look up his (net asset value) and slam him anymore,'' he said. ``He's been just bombarded.'' Hedge funds, as long as they have fewer than 100 investors, don't have to register as mutual funds and are not subject to the same Securities and Exchange Commission scrutiny. Mr. Vanesa of Van Hedge Fund Advisors said if Mr. Gibbons is planning a hedge fund, that doesn't rule out the possibility of him someday launching mutual funds. ``But it's very unusual,'' he said. ``It's more common for somebody whose business is mutual funds to incidentally run a hedge fund.'' He said while mutual-fund managers usually work within large organizations, hedge-fund managers ``tend to be quite entrepreneurial.'' Observers say Mr. Gibbons should have no trouble raising more than $1 billion for his new firm, which would give him a spot among the small group of hedge-fund managers with such a large asset base. ``There are a handful of managers managing over a billion (dollars),'' said Nicole Tramel, director of TASS Management Ltd., a specialist information and research company that tracks hedge funds. ``The majority manage less than $100 million,'' Ms. Tramel said. She added that while there are many hedge funds that focus on specific industries like technology or finance, most of the larger funds are ``global macroplayers,'' meaning they don't limit their investment options. When a manager leaves a fund group and starts a hedge fund, ``the most difficult adjustment is becoming familiar and fluid with the short side of the market so that you can take advantage of it,'' Ms. Tramel said.
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