Hudson To Walk The Plank?
There may be ups and downs (excuse us—choppy waters and those that are calm) at Pirate Capital but it’s nice to know that the one thing you can always depend on is Tom Hudson—being a jerk. In a lengthy profile today, Bloomberg offers exhaustive evidence to support this claim of the hedge fund manager who puts the fledgling Pirate Capital LLC’s “booty” motto on hats and foam-rubber galleons (which alone should be enough to convince you).
There is, of course, Magnum Global Investments, a former client of Pirate that is suing the buccaneers for failing to pay for directing $28 million in investments their way. Then there’s the adultery, which probably facilitated the three failed marriages. The argument that he was unfairly fired from Goldman Sachs for having an affair with a subordinate (which he admitted to) because “senior executives were having dalliances of their own.” His sadistic disregard for aquatic life, which he obviously nurtured and encouraged in his employees (“in the past, he’s dispatched interns to a PetSmart store a half mile down the road to buy minnows for his fish to devour, to the leering delight of his staff”). His use of child labor (“He’s also ordered interns to work seven days a week, swabbing the deck of the Jolly Roger, his 27-foot powerboat, and watering flowers at his home in bucolic Wilton, Connecticut”).* His use of slave labor (“Hudson demanded a Monday-Saturday work-week from his full-time employees, former workers say. He brooked no complaints.”). His stereotyping of dogs (“If you want a friend, get a dog,” Hudson told them). His inability to say “I’m sorry” (“I make no apologies”). His blatant disregard for the Ten Commandments, and the energy Moses put into lugging those things down the mountain (“Hudson…claimed he was fired because Urban disapproved of adultery. 'John Urban has publicly made pronouncements condemning extramarital sexual relations and justified this condemnation by reference to religious beliefs' ”). He’s a sociopath (“He offered them a money-making opportunity…one by one, Hudson’s guests stepped into a clear plastic chamber. Inside was play money—cash emblazoned with skulls and crossbones. An electric fan then sent the bills swirling into the air. The object: Grab as much money as fast as possible”). He wears silk shirts (“Hudson swapped some of his old Oxford shirts for silk ones”).
There is, however, no accounting for taste. And some of you do better with visuals. Unfortunately, we have no visuals, but there is this:
Since May 2006, Hudson has battled trading losses and a rebellion within his firm. More than half of his two dozen employees have left, including his most- active analyst, Zachary George.Pirate is leaking money. Its assets fell to $1.56 billion as of Oct. 31 from a peak of $1.8 billion in August, according to figures Pirate has sent to investors. That figure has since fallen to $1.1 billion. Hudson’s Jolly Roger Fund returned 9.5 percent in 2006, trailing a 15.8 percent return for the Standard & Poor’s 500 Index. It was Pirate’s worst year ever.
Mutiny at Pirate Capital Roils Hudson After Worst Year Ever [Bloomberg]
*Actually, Carney makes us do this too. Inexplicably, the guy loves himself a nice hanging plant.
Comments
how about the fact that he is suing one of his former marketers after he left claiming that they stole a client list and went to a competing firm. If that guy is caling investors and telling them to pull their money then I agree he should be punished as that is not cool.... however, a marketers main tool is his list of contacts and while I am sure his is the same as just about everyone elses it is impossible for Hudson to argue that it is some sort of proprietary list or is critical to Pirate's ability to to business or exist as a hedge fund and perform.... I thought that was the responsibility of the PM and the investment team... seems the marketers did their jobs and brought Hudson the $$$. he should than them not sue them because he obviously has no idea how to run a long lasting business or relationship of anykind so they raise money inspite of him. Stop the lawsuit.. and just a minute... is he using INVESTORS and FIRM money to sue this marketer?? or is it is personal cash? hmmmmm.... maybe investors should ask if this is in the interest of Pirate Capital or Tom Hudson
Posted by: sympathetic | February 2, 2007 06:56 PM
Crap work aside, I know for a fact these kids worked 7 days a week putting together some amazing research for their age. While they did have to swab the deck on occasion and in fact I even heard last summer they played secretary, they did learn more at Pirate than they could have elsewhere. If they worked 85 hour weeks (I lowballed) I would have to guess that 80 would be legit work, these kids are going to go places....hopefully they end up at my shop
Posted by: I Liked The Interns | February 2, 2007 07:44 PM
Boring! Boring Boring!
Its all about the P&L and everything else is BS. He has a good one for a long time.
There are many PMs in the HF world who do the same shit and much worse. Who cares, get a life.
Can't Dealbreaker come up with something new? This is old tired news. Dealbreaker is tiresome
Posted by: smarterThanU | February 2, 2007 09:21 PM
smarterThanU: tiresome
Posted by: Anonymous | February 2, 2007 09:33 PM
It's not the best work, but I would take it if I could get it. Although, taking a ticket for the Titantic could have it's downside. Hudson seems to be distracted with "personal issues" at the moment.
Posted by: Bitchtern | February 2, 2007 10:21 PM
we worked so hard in the office, the house/boat work was a break... I personally loved getting outside for a few hours a week, since that's the only sunlight we got.
But honestly, interning at pirate when its team was still intact was amazing... the analysts worked so well together, and tom's ambition trickled down to every member of the firm. All the former analyst interns could easily excel at another value-oriented shop. I'm not saying Tom's got a high emotional IQ, but the autonomy he afforded his team members and interns has been the catalyst for a lot of promising careers. pay is below industry average but the experience was invaluable
Posted by: intern emeritus | February 3, 2007 03:56 PM
What the article failed to mention - and couldn't mention (no team member would go on record for fear of a lawsuit) - is that the entire operation was thrown down the tubes by the ongoing affair between Tom Hudson and Isa Bolotin.
I agree with "SmarterThanU" insofar as there are plenty of PM's out there who are far worse (I've worked for some). The fact is that Tom Hudson was a smart guy, right until he let is d*ck do the thinking.
Isa Bolotin's is pre-eminently qualified to manage my Michael Boltin MP3 collection, and that's about it. Tom Hudson outsourced management to her, and she managed the Pirate Ship straight into a mutiny.
Posted by: Elephant in the Room | February 4, 2007 06:11 PM
These guys don't know how to tip, but the interns clearly ran the place. Are we really sitting here pumping interns? I am sure they were amazing, but please
Posted by: Pizza Boy | February 7, 2007 04:25 PM
Hudson may very well be the most evil person I have ever met. Could he run a great HF sure, is he going to hell, no question sportsfans.
Posted by: Casper | February 15, 2007 04:53 PM
Isa Bolotin had absolutely nothing to do with the poor management of Pirate Capital. She didn't manage anything except the hostility of the investors stuck in the funds with lockups. Disgruntled employees like to whine that she did beacause they don''t want to admit Tom Hudson couldn't care less about them or their mediocre work. Instead of blaming him for not getting bonuses they blame his girlfriend. Pathetic. None of his investment team members have gone onto to anything half as good as pirate when it was peaking and they can't move on. Tom Hudson ran his firm into the ground. He's a control freak, made all the decisions and that's why anyone who wasnt fired left.
Posted by: Anonymous | February 6, 2008 07:34 AM