Nelson Obus‘ Wynnefield Capital was founded in 1992 by Nelson Obus and Joshua Landes, who continue to act as the fund’s President and Executive Vice President/Treasurer/Secretary respectively. The small, employee-owned hedge fund caters to pooled investment vehicles and profit sharing plans.
The fund’s regulatory assets under management stood at $372 million as of July 6, 2017 with more than 75% of that amount being courtesy of pooled investment vehicles. Through the end of 2015 its small-cap value fund had delivered an annualized rate of return of 13.5% net of fees.
Wynnefield Capital primarily seeks out U.S-based small-cap stocks to invest in, stocks which it believes has or will have company- or industry-specific catalysts to drive growth. Among the potential factors and catalysts that the fund looks for in an investment are changes in government regulations which could have a positive impact on a company or industry, companies which have minimal debt or debt that is rapidly being paid down, and companies which are shareholder-friendly, especially those where the management team’s compensation is tied to shareholder value.
Wynnefield Capital is also an active manager, attempting to work together with the management teams of the companies in which it invests in an effort to help build on those catalysts and bring them to greater market attention, though the fund does not seek board representation in most cases. The fund has a long-term investment horizon for its core positions, which it holds for six-to-eight years on average.
Nelson Obus spent 12 years and millions of dollars battling insider trading charges which he was ultimately found innocent of by a jury in 2014. You can read about the details of Nelson Obus’ insider trading ordeal here.