Key Takeaways
- • SpringOwl Asset Management, co-founded by Jason Ader and Andrew Wallach, plans to launch a new activist fund in Q4 2016 targeting real estate, financial services, consumer, and technology sectors with a goal to raise several hundred million dollars and cap assets at $2 billion.
- • The firm currently manages approximately $140 million in managed accounts for wealthy families and has generated returns between 20% and 40% in 2016, substantially outperforming the activist fund industry average of 5.6%.
- • SpringOwl gained prominence through its role in the 2016 Viacom campaign that resulted in the ouster of the company's chief executive, establishing the firm's credentials in high-profile activist interventions.
- • The activist fund industry faces significant headwinds, with assets allocated to activist strategies declining approximately 8% in H1 2016 to $112.4 billion, as major institutional investors including the New York City Employees Retirement System exit hedge funds citing cost and complexity concerns.
- • Ader identified structural weaknesses in incumbent activist strategies—excessive fund size, concentrated U.S. exposure, poor liquidity terms, and volatility—as opportunities for SpringOwl's differentiated approach, which includes meaningful international positioning with exposure to European markets including the British housing sector.
Summary
SpringOwl Asset Management is preparing to enter a crowded activist fund market with a differentiated strategy, announcing plans to launch a new fund in the fourth quarter of 2016. Co-founders Jason Ader and Andrew Wallach, who established SpringOwl three years prior, seek to capitalize on their track record of generating exceptional returns while addressing structural inefficiencies they identify in incumbent activist managers.
The firm's current investment portfolio, comprising approximately $140 million in managed accounts for high-net-worth families, has delivered returns ranging from 20% to 40% annually in 2016—a performance substantially exceeding the activist fund industry average of 5.6%. Ader's stated objective is to raise several hundred million dollars for the new fund while imposing a $2 billion asset cap, reflecting a disciplined approach to capital management. The firm plans to focus on real estate, financial services, consumer, and technology sectors across both domestic and international markets.
SpringOwl's market entry occurs amid significant industry headwinds. According to Hedge Fund Research, assets allocated to activist strategies contracted approximately 8% in the first half of 2016, declining to $112.4 billion. Institutional investors, including major pension funds such as the New York City Employees Retirement System, are increasingly exiting hedge fund allocations entirely, citing elevated fees and operational complexity. Ader directly addressed these structural criticisms, noting that "activist strategies are out of favor right now because funds got too big, were mostly investing in the United States, had poor liquidity terms and are volatile."
The firm's activism credentials rest substantially on its 2016 Viacom campaign, in which SpringOwl played a material role in securing the chief executive's departure—a high-profile success that validates its operational capability in executing proxy campaigns. The firm maintains meaningful international exposure, including contrarian positions in the British housing market where certain portfolio companies have declined 40% to 60% in value, reflecting a longer-term, value-oriented investment horizon distinct from shorter-cycle activist approaches.
Fundraising for an activist vehicle remains challenging given competitive saturation and institutional skepticism toward the strategy class. However, SpringOwl's differentiated positioning—emphasizing asset discipline, international diversification, superior liquidity terms, and demonstrated operational activism—represents a tactical response to documented investor concerns regarding incumbent fund structures.
The firm's current investment portfolio, comprising approximately $140 million in managed accounts for high-net-worth families, has delivered returns ranging from 20% to 40% annually in 2016—a performance substantially exceeding the activist fund industry average of 5.6%. Ader's stated objective is to raise several hundred million dollars for the new fund while imposing a $2 billion asset cap, reflecting a disciplined approach to capital management. The firm plans to focus on real estate, financial services, consumer, and technology sectors across both domestic and international markets.
SpringOwl's market entry occurs amid significant industry headwinds. According to Hedge Fund Research, assets allocated to activist strategies contracted approximately 8% in the first half of 2016, declining to $112.4 billion. Institutional investors, including major pension funds such as the New York City Employees Retirement System, are increasingly exiting hedge fund allocations entirely, citing elevated fees and operational complexity. Ader directly addressed these structural criticisms, noting that "activist strategies are out of favor right now because funds got too big, were mostly investing in the United States, had poor liquidity terms and are volatile."
The firm's activism credentials rest substantially on its 2016 Viacom campaign, in which SpringOwl played a material role in securing the chief executive's departure—a high-profile success that validates its operational capability in executing proxy campaigns. The firm maintains meaningful international exposure, including contrarian positions in the British housing market where certain portfolio companies have declined 40% to 60% in value, reflecting a longer-term, value-oriented investment horizon distinct from shorter-cycle activist approaches.
Fundraising for an activist vehicle remains challenging given competitive saturation and institutional skepticism toward the strategy class. However, SpringOwl's differentiated positioning—emphasizing asset discipline, international diversification, superior liquidity terms, and demonstrated operational activism—represents a tactical response to documented investor concerns regarding incumbent fund structures.
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