Cornwall Capital
TypePrivate 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

Cornwall Capital is a New York City-based private financial investment corporation, best known as one of the few investors to foresee and profit from the subprime mortgage crisis of 2007, as described in the book The Big Short by Michael Lewis and the subsequent movie of the same name.[2][3]

Cornwall seeks highly asymmetric investments, in which the potential profit greatly exceeds potential loss. Its strategies including benefiting from market inefficiencies to thematic fundamental trades. From 2003 to 2012, the firm produced an average annual compounded net return of 40 percent (52 percent gross).[1]

History

The firm was founded in 2003 by Jamie Mai as a family office to diversify the capital 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][4][5]

Jamie Mai became president and chief investment officer. Charlie Ledley, a former private equity colleague, joined the firm shortly thereafter. In 2005, Ben Hockett joined as head trader, bringing extensive knowledge of capital markets, derivatives, and fixed income trading.[1]

Cornwall Capital was one of a few investors who saw and shorted the subprime mortgage crisis market before its 2007 collapse. Author Michael Lewis wrote in his 2012 book The Big Short that they were perhaps one out of 20 investors in the world who did so.[3][6] This particular trade generated 80 times the initial investment.[1] Ledley, Mai, and Hockett were featured in the film adaptation of The Big Short, fictionalized with the names Charlie Geller, Jamie Shipley, and Ben Rickert, and played by John Magaro, Finn Wittrock and Brad Pitt.[7]

Ledley left Cornwall in 2009 to join a large Boston-based hedge fund.[1]

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.[8][9]

In May 2011, Mai began opening the fund to a few like-minded investors with whom he could share ideas.[1]

In 2012, Mai's investment strategy was described in Jack D. Schwager's book Hedge Fund Market Wizards, which purported to examine the world's greatest hedge fund experts and their strategies.[1]

In 2013, Cornwall Capital was reported to have become the largest shareholder of chemicals manufacturer American Pacific Corporation, a NASDAQ-listed U.S. company, with close to 15% of the outstanding stock.[10] American Pacific Corporation agreed to nominate 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]

Notes

  1. 1 2 3 4 5 6 7 8 9 Jack D. Schwager.Hedge Fund Market Wizards, John Wiley & Sons, 2012. ISBN 978-1-118-27304-3
  2. ↑ Cornwall Capital, official website.
  3. 1 2 Michael Lewis. The Big Short, W. W. Norton, 2010. ISBN 978-0-393-07223-5
  4. ↑ All geek to them: A handful of outsiders come out of the crisis in credit, The Economist, Mar 18th 2010.
  5. ↑ Hardy Green. "Michael Lewis’ Big Short an unsettling experience". Reuters, March 11, 2010.
  6. ↑ "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.
  7. ↑ Truffaut-Wong, Olivia. "Where Are Jamie & Charlie From 'The Big Short' Now? They've Come A Long Way". Bustle.
  8. ↑ "Jean-Christophe de Swaan". Princeton University. Retrieved April 11, 2014.
  9. ↑ "American Pacific Corporation, 2013 Schedule 14A Proxy Statement". American Pacific Corporation. Retrieved April 10, 2014.
  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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