Appaloosa Management 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 sho ...

founded in 1993 by

David Tepper David Alan Tepper (born September 11, 1957) is an American billionaire hedge fund manager. He is the owner of the Carolina Panthers of the National Football League (NFL) and Charlotte FC in Major League Soccer (MLS). Tepper is the founder and p ...

and Jack Walton specializing in distressed debt. Appaloosa Management invests in

public equity A public company is a company whose ownership is organized via shares of stock which are intended to be freely traded on a stock exchange or in over-the-counter markets. A public (publicly traded) company can be listed on a stock exchange (list ...

and

fixed income Fixed income refers to any type of investment under which the borrower or issuer is obliged to make payments of a fixed amount on a fixed schedule. For example, the borrower may have to pay interest at a fixed rate once a year and repay the prin ...

markets around the world.

History

In 1993,

and Jack Walton, founded Appaloosa Management, an employee-owned hedge fund, in

Chatham, New Jersey "The Chathams" is a term used in reference to shared services for two neighboring municipalities in Morris County, New Jersey, Morris County, New Jersey, United States – Chatham Borough, New Jersey, Chatham Borough and Chatham Township, New Jers ...

. Throughout the 1990s, the firm was known as a junk bond investment boutique, and through the 2000s it was known as a hedge fund. In March 2021, David Tepper said it's increasingly difficult to be bearish on stock rights now, feeling that rising rates are set to stabilize, and that the sell off in treasuries that has driven rates up is probably over.

2002 Conseco & Marconi Corp.

In the fourth quarter of 2002, Appaloosa Management returns were heavily a result of junk-bond and distressed debt bets in

Conseco CNO Financial Group, Inc. (formerly Conseco, Inc. (from Consolidated National Security Corporation)) is a financial services holding company based in Carmel, Indiana. Its insurance subsidiaries provide life insurance, annuity and supplemental he ...

and Marconi Corp. that the market was bottoming out.

2007 Delphi

Assets under management in 2007 were $5.3 billion. The ''

Financial Times The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and published digitally that focuses on business and economic current affairs. Based in London, England, the paper is owned by a Japanese holding company, Nik ...

'' reports the company has "attracted interest for its large ownership position in

Delphi Delphi (; ), in legend previously called Pytho (Πυθώ), in ancient times was a sacred precinct that served as the seat of Pythia, the major oracle who was consulted about important decisions throughout the ancient classical world. The oracle ...

, the bankrupt car parts supplier, and its clashes on whether management has the shareholders best interests in mind or those of GM and the

UAW The International Union, United Automobile, Aerospace, and Agricultural Implement Workers of America, better known as the United Auto Workers (UAW), is an American Labor unions in the United States, labor union that represents workers in the Un ...

2008 financial crisis through 2011

Appaloosa survived the financial crisis of 2008 with relatively few

investor An investor is a person who allocates financial capital with the expectation of a future Return on capital, return (profit) or to gain an advantage (interest). Through this allocated capital most of the time the investor purchases some specie ...

redemption orders. From 2009 to 2010, Appaloosa Management's assets under management grew from $5 billion to $12 billion. In November 2010,

the New York Times ''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid ...

reported total assets under management of $14 billion. In 2010, it was reported that since 1993 Appaloosa Management had returned $12.4 billion to clients—ranking it sixth on a ranking of total returns to clients by managers since inception. In September 2011, a Delaware bankruptcy court found that Appaloosa Management is one of four hedge funds that had played a role in Washington Mutual’s restructuring which might have received

confidential information Confidentiality involves a set of rules or a promise usually executed through confidentiality agreements that limits the access or places restrictions on certain types of information. Legal confidentiality By law, lawyers are often required ...

that could have been used to trade improperly in the bank’s debt. In 2011, the company was awarded the Institutional Hedge Fund Firm of the Year award. In January 2016, Appaloosa's headquarters were relocated to

Miami Beach Miami Beach is a coastal resort city in Miami-Dade County, Florida. It was incorporated on March 26, 1915. The municipality is located on natural and man-made barrier islands between the Atlantic Ocean and Biscayne Bay, the latter of which sep ...

Florida Florida is a state located in the Southeastern region of the United States. Florida is bordered to the west by the Gulf of Mexico, to the northwest by Alabama, to the north by Georgia, to the east by the Bahamas and Atlantic Ocean, and to ...

Investment strategy

Appaloosa Management's investments focus on undiversified concentrated investment positions. Appaloosa invests in the global

and

markets with a focus on "equities and debt of distressed companies, bonds, exchange warrants, options,

futures Futures may mean: Finance *Futures contract, a tradable financial derivatives contract *Futures exchange, a financial market where futures contracts are traded * ''Futures'' (magazine), an American finance magazine Music * ''Futures'' (album), a ...

, notes, and

junk bond In finance, a high-yield bond (non-investment-grade bond, speculative-grade bond, or junk bond) is a bond that is rated below investment grade by credit rating agencies. These bonds have a higher risk of default or other adverse credit events, ...

s." According to

BusinessWeek ''Bloomberg Businessweek'', previously known as ''BusinessWeek'', is an American weekly business magazine published fifty times a year. Since 2009, the magazine is owned by New York City-based Bloomberg L.P. The magazine debuted in New York City ...

, the firm's client base consists of

high-net-worth individual High-net-worth individual (HNWI) is a term used by some segments of the financial services industry to designate persons whose investible wealth (assets such as stocks and bonds) exceeds a given amount. Typically, these individuals are defined ...

s, pension and

profit sharing plan A profit-sharing agreement for pensions, typically in the United States, is an agreement that establishes a pension plan maintained by the employer to share a portion of its profits with its employees. History A profit-sharing agreement used to ...

s, corporations, foreign governments, foundations, universities, and other organizations." Investors commit to a locked period of three years during which their withdrawals are limited to 25 percent of their total investment.

Products and performance

Appaloosa Management manages four investment vehicles: the offshore ''Palomino Fund LTD'', an offshore and onshore version of its ''Thoroughbred'' fund, and its flagship fund ''Appaloosa Investment''. A complete list of current holdings can be foun
here

Palomino Fund

The Palomino Fund from its inception in 1995 to 1998 had a 25 percent return. After Russia defaulted, the fund lost 49 percent of its value between February to September 1998. The fund returned –26.7% percent in 2008 and 117.3 percent in 2009. The company was ranked by Bloomberg Markets as the top performing fund of any hedge fund manager managing over one billion dollars.

Appaloosa Investment I

In 2001, the fund was up 67 percent followed the next year losing 25 percent. In 2003 the fund saw 149 percent returns for investors.

Administration

The company leaders include: *

, Founder and President, * Michael L. Palmer, Chief Financial Officer, * Jeffrey L. Kaplan, Chief Operating Officer.

References

{{Hedge funds Financial services companies established in 1993 Hedge fund firms of the United States Investment management companies of the United States Hedge funds