Värde Partners (Värde) is an American
alternative investment
An alternative investment, also known as an alternative asset or alternative investment fund (AIF), is an investment in any Asset classes, asset class excluding capital stocks, Bond (finance), bonds, and cash.
The term is a relatively loose ...
management firm headquartered in
Minneapolis, Minnesota
Minneapolis is a city in Hennepin County, Minnesota, United States, and its county seat. With a population of 429,954 as of the 2020 United States census, 2020 census, it is the state's List of cities in Minnesota, most populous city. Locat ...
. The firm focuses on investments in credit-related assets and
distressed securities
In corporate finance, distressed securities are security (finance), securities over companies or government entities that are experiencing Financial distress, financial or operational distress, Default (finance), default, or are under bankruptcy. ...
although it has also expanded into other areas of alternative investments including real estate.
Outside the United States, the firm has offices in
Luxembourg
Luxembourg, officially the Grand Duchy of Luxembourg, is a landlocked country in Western Europe. It is bordered by Belgium to the west and north, Germany to the east, and France on the south. Its capital and most populous city, Luxembour ...
,
London
London is the Capital city, capital and List of urban areas in the United Kingdom, largest city of both England and the United Kingdom, with a population of in . London metropolitan area, Its wider metropolitan area is the largest in Wester ...
,
Mumbai
Mumbai ( ; ), also known as Bombay ( ; its official name until 1995), is the capital city of the Indian state of Maharashtra. Mumbai is the financial capital and the most populous city proper of India with an estimated population of 12 ...
and
Singapore
Singapore, officially the Republic of Singapore, is an island country and city-state in Southeast Asia. The country's territory comprises one main island, 63 satellite islands and islets, and one outlying islet. It is about one degree ...
.
Background
Värde Partners was founded in 1993 by three former
Cargill
Cargill, Incorporated is an American multinational food corporation based in Minnetonka, Minnesota, Minnetonka, Minnesota, and incorporated in Wilmington, Delaware. Founded in 1865 by William Wallace Cargill, it is the largest privately held c ...
financial executives, George Hicks, Marcia Page and Greg McMillan. Värde gets its name from the Swedish word for value.
Värde originally started as a
hedge fund
A hedge fund is a Pooling (resource management), pooled investment fund that holds Market liquidity, liquid assets and that makes use of complex trader (finance), trading and risk management techniques to aim to improve investment performance and ...
that focused on
distressed securities
In corporate finance, distressed securities are security (finance), securities over companies or government entities that are experiencing Financial distress, financial or operational distress, Default (finance), default, or are under bankruptcy. ...
and grew slowly in its early years before expanding into other alternative investments. It has been viewed as a much lower profile firm compared to others such as
Kohlberg Kravis Roberts
KKR & Co. Inc., also known as Kohlberg Kravis Roberts & Co., is an American global private-equity and investment company. , the firm had completed private-equity investments in portfolio companies with approximately $710 billion of total ...
,
The Carlyle Group
The Carlyle Group Inc. is an American multinational company with operations in private equity, alternative asset management and financial services. As of 2023, the company had $426 billion of assets under management.
Carlyle specializes in ...
and
Apollo Global Management
Apollo Global Management, Inc. is an American asset management firm that primarily invests in alternative assets. , the company had $548 billion of assets under management, including $392 billion invested in credit, including mezzanine capita ...
, and Hicks has stated the firm's intention is to "do a good job and be a great place to work". He has also stated that the firm intends to grow and has no intention of becoming a
family office
A family office is a privately held company that handles investment management and wealth management for a wealthy family, generally one with at least $50–100 million in investable assets, with the goal being to effectively grow and transfer ...
. At the end of 2020, Värde had around 500 clients which were
institutional investor
An institutional investor is an entity that pools money to purchase securities, real property, and other investment assets or originate loans. Institutional investors include commercial banks, central banks, credit unions, government-linked ...
s.
In 2015, Värde moved its headquarters from
Bloomington to the
AT&T tower in
Minneapolis
Minneapolis is a city in Hennepin County, Minnesota, United States, and its county seat. With a population of 429,954 as of the 2020 United States census, 2020 census, it is the state's List of cities in Minnesota, most populous city. Locat ...
. The move was driven by the firm's younger employees wanting to work downtown.
During the
COVID-19 pandemic
The COVID-19 pandemic (also known as the coronavirus pandemic and COVID pandemic), caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), began with an disease outbreak, outbreak of COVID-19 in Wuhan, China, in December ...
, Värde portfolio managers saw significant investment opportunities due to historic market dislocations and economic disruption, and invested in senior bonds of select U.S. carriers that it believed could sustain reduced traffic for a significant period.
All three co-founders of Värde have now retired from active management of the firm. McMillan retired in 2008 while Page retired in 2015. Hicks retired in January 2022 and was succeeded by Ilfryn Carstairs. Page and Hicks remain
members of the board for Värde.
Notable deals
In 2011, Värde did a
debt-for-equity swap with
Crest Nicholson
Crest Nicholson is a British housebuilding company based in Weybridge, Surrey. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index.
History
1963-2000
The company was founded by Bryan Skinner in 1963 as Crest Hom ...
become its majority owner. When Crest Nicholson relisted in 2013, its share price significantly increased allowing Värde to profit from its sale.
In March 2015, consortium of investors that included Värde,
Deutsche Bank
Deutsche Bank AG (, ) is a Germany, German multinational Investment banking, investment bank and financial services company headquartered in Frankfurt, Germany, and dual-listed on the Frankfurt Stock Exchange and the New York Stock Exchange.
...
and Kohlberg Kravis Roberts acquired GE Capital's consumer lending business in
Australia and New Zealand for $6.3 billion. It was renamed to
Latitude Financial Services.
In November 2016,
Citigroup
Citigroup Inc. or Citi (Style (visual arts), stylized as citi) is an American multinational investment banking, investment bank and financial services company based in New York City. The company was formed in 1998 by the merger of Citicorp, t ...
agreed to sell its Canadian subprime lending unit, CitiFinancial Canada to Värde and
J.C. Flowers & Co. for an undisclosed amount.
In January 2018, Värde and Apollo Global Management acquired a 40.5% stake of
OneMain Financial from
Fortress Investment Group
Fortress Investment Group, LLC is an American investment management firm based in New York City. It was founded as a private equity firm in 1998 by Wes Edens, Rob Kauffman, Pete Briger, Michael Novogratz, and Randal Nardone.
Overview
When ...
for $1.4 billion.
In February 2023, Värde and Hawkins Way Capital acquired
New York Marriott East Side from
DekaBank for $153.4 million. This was a loss of nearly $117 million from its previous sale price.
In March 2023, Värde was reported to have made over $50 million in profits after it invested in senior unsecured bonds and held equity
short position
In finance, being short in an asset means investing in such a way that the investor will profit if the market value of the asset falls. This is the opposite of the more common long position, where the investor will profit if the market value ...
s in
Credit Suisse
Credit Suisse Group AG (, ) was a global Investment banking, investment bank and financial services firm founded and based in Switzerland. According to UBS, eventually Credit Suisse was to be fully integrated into UBS. While the integration ...
. Värde increased its bond investment when it the
acquisition of Credit Suisse by UBS looked more likely and would spare the bondholders from most losses. While Värde lost money from
additional tier one bonds, overall its bet had a return greater than 20%.
In July 2023, after
Goldman Sachs
The Goldman Sachs Group, Inc. ( ) is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered in Lower Manhattan in New York City, with regional headquarters in many internationa ...
closed its consumer lending arm Marcus, it sold $1 Billion of Marcus Loans to Värde.
References
External links
*
{{DEFAULTSORT:Värde Partners
1993 establishments in Minnesota
Companies based in Minnesota
Financial services companies established in 1993
Investment companies of the United States
Private equity firms of the United States