Soroban Capital: Performance, Strategy, AUM and Partners

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If you are following investors and still haven’t heard about Eric W. Mandelblatt, you might want to change that. Eric W. Mandelblatt, who runs Soroban Capital Partners, will be one of the best investors in the next decade. At least that’s what Stan Druckenmiller, a legendary investor of our time considers. During an interview with CNBC‘s Kelly Evans in 2015, Druckenmiller singled out three “young lions”, Druckenmiller’s alumnus Zach Schreiber of PointState Capital, Tiger Cub Chase Coleman of Tiger Global Management, and Mandelblatt, all three of which, Druckenmiller believes will be considered legends in the next 15 or 20 years.

In 1998, Mandelblatt joined Goldman Sachs, right after graduating from the University of Florida with a BS in Accounting and a Certificate of Completion of a BA in Finance. At Goldman Sachs, he worked as an equity research analyst in the Investment Research Department, where he covered natural gas pipeline and distribution companies and Master Limited Partnerships. In 2002, Mandelblatt became an analyst/investor at Goldman Sachs Principal Strategies Group and two years later was promoted to Chief Operating Officer of the US Principal Strategies business. In 2005, Mandelblatt left Goldman Sachs to co-found a hedge fund, TPG-Axon Management, with Dinakar Singh.

In January 2010, TPG-Axon merged with London-based Montrica Investment Management, but several months earlier, Mandelblatt left his fund to create Soroban Capital Partners. In October, Mandelblatt launched Soroban together with Gaurav Kapadia, who had also been a partner at TPG-Axon, and Scott Friedman, TPG-Axon’s head trader. In addition, Mandelblatt hired Vito Tanzi, former Kalix Advisors CFO, who is currently a partner at Soroban, as well as its CFO and COO. The fund also employs, Steve Thomas, the former Head of Business Development and Investor Relations of Highbridge Capital Management, who is a partner and Head of Investor Relations. All partners where at the fund from the beginning and invested their own money in the fund.

Eric Mandelblatt Soroban Capital Partners

Currently, Soroban Capital Partners has over $11 billion in regulatory assets under management, according to a regulatory filing. The fund makes long and short investments in a variety of securities, including stocks, equity and sector indices, commodities, credit, and currencies. It focuses on companies with a catalyst for a change in earnings/cash flow or valuation and industries and transformation.

Even though most of Soroban’s investments are passive, the fund also had several activist positions. One of the most widely covered was its bet on Williams Companies Inc (NYSE:WMB). In 2014, Soroban Partners joined forces with Keith Meister’s Corvex Management, another activist, and agreed to coordinate their efforts regarding the company. The same year, Williams Companies Inc (NYSE:WMB) reached an agreement with both funds and appointed Messrs. Mandelblatt and Meister to its board of directors.

Both investors kept to press the company to improve shareholder value and tried to ouster CEO Alan S. Armstrong. They both played a key role in pushing for the merger between Williams and Energy Transfer Partners, but the deal fell through in 2016. After that half of Williams’ board resigned following a failed vote to oust the CEO and a day later, Mandelblatt and Meister quit as well, with Mandelblatt saying in a letter: ““I cannot serve on a board that continues to empower a C.E.O. with an abysmal operational and financial track record, and who in my opinion lacks the necessary judgment and character to lead the company forward.” Soroban liquidated its position in Williams Companies by the end of 2016.

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Another reason to follow Soroban Capital Partners is that its picks on average outperform the market. For example, in the first six months of 2017, the fund’s long positions in companies worth over $1.0 billion posted a weighted average return of 13.9%, according to our calculations. This return beat the S&P 500 by more than five percentage points. Over the 12-month period between June 2016 and 2017, Soroban’s picks returned over 43%. We follow Soroban alongside more than 600 other funds and offer our readers the possibility to follow these funds closely and receive alerts whenever they disclose updates to their portfolios via 13D and 13G filings with the Securities and Exchange Commission. To receive these real-time alerts, you should sign up on Insider Monkey and add Soroban (or any other fund in our database) to your follow list.

Follow Eric W. Mandelblatt's Soroban Capital Partners

In its latest 13F filing, Soroban Capital disclosed an equity portfolio worth $25.68 billion, with consumer and tech stocks amassing the largest shares. On the following pages, we will take a look at some of the top holdings in Soroban’s equity portfolio, as well as companies in which the fund initiated stakes between April and June.

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