Steel Partners Seeks to Convert Largest Fund to Public Company
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Activist investment hedge fund, Steel Partners, managed by Warren Lichtenstein is looking to convert its largest hedge fund into a publicly traded partnership after clients tried to withdraw close to 40% of their money.
The $1.2 billion Steel Partners II Fund lost 39% last year and froze redemptions this past December. Mr. Lichtenstein is hoping investors will approve a plan to merge the fund with WebFinancial LP, a publicly traded partnership it already controls. This would permit withdrawals to resume without forcing the fund to liquidate assets.
"The WebFinancial structure achieves our objectives of providing liquidity to those that want it, while maximizing value for all our investors," Steel Partners LLC said in a statement that Bloomberg reviewed. If this conversion is approved, Steel Partners expects investors to be able to begin selling WebFinancial units by June.
Steel Partners II returned about 22% annually, between 1993 and 2007, and 2008 was its first losing year. Overall, Lichtenstein’s firm manages about $2.5 billion. WebFinancial, based in New York, is a holding company whose businesses include an industrial loan provider.
Steel Partners II, like many other activist investors, runs a focused portfolio, with stakes in 11 companies comprising about 65%of assets, according to Bloomberg. It typically holds stakes in companies for three years or more.
Some of the fund's largest holdings include: a 9.5% stake in Rowan Cos. (NYSE: RDC), and a 75% of WHX Corp. (Nasdaq: WXCO), owner of the Handy & Harman metal-products company.
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