Anchorage Capital Group (Anchorage) is an American

hedge fund A hedge fund is a pooled investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading, portfolio-construction, and risk management techniques in an attempt to improve performance, such as ...

based in

New York City New York, often called New York City or NYC, is the most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the most densely populated major city in the U ...

. The firm is known as one of the world's most prominent

vulture fund A vulture fund is a hedge fund, private-equity fund or distressed debt fund, that invests in debt considered to be very weak or in default, known as distressed securities. Investors in the fund profit by buying debt at a discounted price on ...

s, funds that invest in

distressed securities Distressed securities are securities over companies or government entities that are experiencing financial or operational distress, default, or are under bankruptcy. As far as debt securities, this is called distressed debt. Purchasing or holding s ...

Background

Anchorage was founded in 2003 by Kevin Ulrich and Tony Davis. Both of them were previously working in the distressed debt business of Goldman Sachs. The firm received $100 million in

seed money Seed money, sometimes known as seed funding or seed capital, is a form of securities offering in which an investor invests capital in a startup company in exchange for an equity stake or convertible note stake in the company. The term ''seed'' ...

from Reservoir Capital Group. Later on Davis, left the firm to start a new one named Inherent Group which focused on ESG investments. In December 2021, Anchorage announced it would close its $7.4 billion credit flagship fund (ACP Capital) due to lackluster returns and difficulties in markets such as distressed securities. The firm would move on to focus more on investments related to

structured finance Structured finance is a sector of finance - specifically financial law - that manages leverage and risk. Strategies may involve legal and corporate restructuring, off balance sheet accounting, or the use of financial instruments. Securitizatio ...

like collateralized loan obligations as well as private credit. At the same time, co-founder Ulrich also announced he would be stepping down from his role as CEO to move to a new role as Chairman. One of the potential factors that led to this apart from the firm's recent performance was the fact that in 2019, Ulrich was sued by a woman accusing him of

sexual assault Sexual assault is an act in which one intentionally sexually touches another person without that person's consent, or coerces or physically forces a person to engage in a sexual act against their will. It is a form of sexual violence, whi ...

in a Manhattan hotel. The complaint was withdrawn later after Ulrich settled with the accuser, but the firm's clients were displeased by the firm's failure to disclose the allegations after they appeared on

public record Public records are documents or pieces of information that are not considered confidential and generally pertain to the conduct of government. For example, in California, when a couple fills out a marriage license application, they have the opti ...

. Anchorage is headquartered in New York City and has an additional office in London. Although Anchorage mainly invests in distressed securities such as securities of Eir and New Look, in recent years it has been involved in funding

startups A startup or start-up is a company or project undertaken by an entrepreneur to seek, develop, and validate a scalable business model. While entrepreneurship refers to all new businesses, including self-employment and businesses that never intend t ...

and early stage companies such as Brat TV, Eko and

SingleStore SingleStore (formerly MemSQL) is a proprietary, cloud-native database designed for data-intensive applications. A distributed, relational, SQL database management system (RDBMS) that features ANSI SQL support, it is known for speed in da ...

Notable deals

MGM Studios

One of the most notable deals that Anchorage was involved in was investing $500 million in

MGM Studios Metro-Goldwyn-Mayer Studios Inc., also known as Metro-Goldwyn-Mayer Pictures and abbreviated as MGM, is an American film, television production, distribution and media company owned by Amazon through MGM Holdings, founded on April 17, 1924 a ...

in 2010 to bring it out of bankruptcy. Ulrich joined its board in 2010 and became chairman in 2017. During the period Anchorage held MGM Studios, it had to fight off efforts by activist shareholder,

Carl Icahn Carl Celian Icahn (; born February 16, 1936) is an American financier. He is the founder and controlling shareholder of Icahn Enterprises, a public company and diversified conglomerate holding company based in Sunny Isles Beach. Icahn takes l ...

to take control of MGM studios. Gary Barber was brought in by Ulrich to become CEO in 2010 but a rift between the two grew. On October 2017, Barber received a contract renewal for 5 years until 2022. But only several months later, he was fired and given a $260 million

severance package A severance package is pay and benefits that employees may be entitled to receive when they leave employment at a company unwillfully. In addition to their remaining regular pay, it may include some of the following: * Any additional payment base ...

. He was never replaced and in the interim, the company was led by the newly formed "Office of the CEO". In 2021, MGM studios was sold to

Amazon Amazon most often refers to: * Amazons, a tribe of female warriors in Greek mythology * Amazon rainforest, a rainforest covering most of the Amazon basin * Amazon River, in South America * Amazon (company), an American multinational technolog ...

for $8.45 billion which resulted in a $2 billion profit for Anchorage.

J.Crew

On May 4, 2020, J.Crew announced that it would apply for

bankruptcy protection Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor ...

amidst the

COVID-19 pandemic The COVID-19 pandemic, also known as the coronavirus pandemic, is an ongoing global pandemic of coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The novel virus was first identified ...

. On September 11, 2020, it was announced that J.Crew had exited bankruptcy after Anchorage invested in it.

Disputes

In 2013,

BNP Paribas BNP Paribas is a French international banking group, founded in 2000 from the merger between Banque Nationale de Paris (BNP, "National Bank of Paris") and Paribas, formerly known as the Banque de Paris et des Pays-Bas. The full name of the gro ...

sued Anchorage Capital after it agreed to purchase $60 million worth of debt from Irish Bank Resolution Corporation and then failed to pay. The court ruled in favour of BNP Paribas.

References

External links

* {{authority control 2003 establishments in New York City Financial services companies established in 2003 Hedge fund firms in New York City Investment management companies of the United States Privately held companies based in New York City