ORIGINATOR PROFILE
FourWorld Capital Management
FourWorld Capital Management is a hedge fund with offices in New York and Berlin that focuses on event-driven public markets investment opportunities, including tax, bankruptcy, mergers, legal, and regulatory catalysts. The Originator was formed in 2015 by John Addis, who ran Bank of America’s Equity Finance trading unit. Over half of its investments are in appraisal actions with the remainder in other event-driven strategies.
Investment Methodology & Portfolio Management
FourWorld seeks to generate outsized, uncorrelated absolute returns using a unique approach to special situations and event-driven investing focused on tax, legal, and regulatory catalysts with a primary focus on litigation-based events. The Originator prefers to have a “hands on” role in their investments in order to actively drive litigation efforts and invests in a sufficient size to gain access to trustees and management.
FourWorld is able to source and invest in esoteric, complex, or neglected special situations that many managers are unwilling or unable to understand. The Originator reviews state and federal court case news and dockets with a focus on cases that may affect public companies. FourWorld also monitors developments in major legislative proposals and developments at regulatory agencies such as the FTC, SEC, IRS, and DOJ. Additionally, FourWorld reviews public company filings such as 10-K’s, 10-Q’s, and 8-K’s for lawsuit disclosures as well as 13-F’s and 13-D’s for lists of insider holdings. The Originator has ongoing discussions with outside legal, tax, and regulatory advisors as to recent developments in the industry landscape and potential areas of interest worth focusing on.
Catalysts:
- Litigation
- Bankruptcy
- Restructuring
- Regulatory Issues
- Fraud
- Fiduciary Breach
- Tax Complexities
- Merger Arbitrage
- Corporate Structure Complexity
- Broken Balance Sheets
FourWorld actively monitors its concentrations within and across funds. Investments are regularly stress-tested and evaluated for industry/sector/fundamental exposures. FourWorld often employs hedging strategies to further protect from adverse events. The typical hold time for investments other than those with litigation is 6 to 12 months. Investments focused on litigation have typical terms of 2 to 3 years.
Typical Investment characteristics
- 6-12 month hold period except for investments with heavy litigation catalysts
- Market capitalization greater than $500M
- North American and Western European exchange-listed or OTC markets
- Identifiable catalyst within core competency
Portfolio Metrics & Performance
FourWorld currently has over $650M in AUM across 8 countries and has deployed over $1.1Bn across its various strategies over the last five years with double-digit returns on realized investments. Litigation-driven strategies represent the majority of its assets. The Originator currently has 18 live appraisal trades in 8 countries.
Management
John Addis
Founder, CIO, & Portfolio ManagerJohn has over 20 years of experience in event driven trading, structuring, and equity finance. Prior to founding FourWorld in 2015, John was a managing director and Head of US Delta One Trading at Merrill Lynch where he led +80 traders and structurers focused on single stock swaps, index arbitrage, event-driven trading and stock lending teams. In total, John had risk responsibility of +$200Bn in financing, trading and stock loan balances. Prior to leading Delta One Trading, John served as Head of Global Markets Financing and Futures for Merrill Lynch where he led a team of 180 employees and oversaw a full complement of European financing businesses including European prime brokerage, equity finance, special situations/event-driven trading, financing sales, client service, capital introductions and product development. John earned an MBA from Carnegie Mellon, a JD from the University of Pittsburgh School of Law, and a BA from Cornell University.
Neil Kennedy
Head of Trading & ExecutionNeil joined FourWorld in 2015 and is responsible for all trading functions, risk management and hedging as well as involvement in the risk arbitrage idea generation and trade selection. Prior to joining FourWorld, Neil was a managing director and portfolio manager of the Harbert Event Opportunities Fund, a fund specializing in merger arbitrage and event-driven investing. Under his leadership in 2012, the fund was recognized by Bloomberg as a top ten performing merger arbitrage funds over the past five years. Prior to managing the Harbert Event Opportunities Fund, Neil founded and co-led the risk arbitrage/special situations strategy for Hamilton Partners, a multi-strategy fund wholly owned by Stockton Reinsurance Limited. While at Hamilton, Neil’s strategy generated average annual returns of 15.6% between 1997 and 2004. Neil began his career as a NYSE floor clerk, then worked on the Chicago execution desk, and then as a market maker on the American Stock Exchange.
Chris Jaeger
Senior AnalystChris is responsible for idea generation and investment analysis. Prior to joining the Originator in 2016, Chris was a vice president of equity derivatives, event-driven, and structured trading at Bank of America Merrill Lynch. In between roles at Merrill Lynch, Chris spent three years founding a technology startup company which received two institutional funding rounds and was ultimately sold in 2013. Prior to his work with the startup, he worked on the Structured Equity Finance and Trading Team at Merrill Lynch, where he was responsible for structuring and execution of bespoke non-traditional trades on behalf of the firm and major hedge fund clients encompassing derivative, stock loan, and cash components. Chris graduated cum laude from Princeton University in 2004.
2 Represents an net annualized return, using an internal rate of return (IRR) methodology, with respect to the matured investments shown in your Portfolio experience, utilizing the effective dates and amounts of subscriptions and distributions to and from the investments, net of management fees and all other expenses charged to the investments.[read more]