In 1994, Charles E. Davidson and Joseph Jacobs co-founded Wexford Capital, a Greenwich, Connecticut-based hedge fund that currently has around $7.0 billion in assets under management. Wexford manages several hedge funds: the opportunistic/global macro Wexford Spectrum Fund, the multi-strategy oriented Wexford Credit Opportunities Fund, the energy and natural resources-focused Wexford Catalyst Fund, and Wexford Global Strategies Fund, which focuses on fixed income. In addition, Wexford has several private equity funds that manage around $6 billion in private equity investments.
Mr. Davidson, an MBA graduate of the University of California, Los Angeles, serves as the Portfolio Management for the Wexford Spectrum, Wexford Catalyst, and Wexford Credit Opportunities funds. Prior to co-founding Wexford, Mr. Davidson worked as the head of domestic corporate bond and proprietary trading at Goldman Sachs between 1977 and 1984 and between 1984 and 1994 he was a General Partner at Steinhardt Partners. Joseph Jacobs, the president of Wexford Capital, worked at Bear Sterns & Co., Inc. between 1982 and 1994. Mr. Jacobs has an MBA from Harvard Business School and was also employed as a commercial lending officer at Citibank between 1979 and 1982.
In addition to holding a vast portfolio of investments across different asset classes, Wexford Capital is also an activist fund specializing in distressed situation investments, due to the background of its co-founders, both of whom have experience in this type of investments. Earlier this year, Wexford acquired a stake in Adeptus Health after the company filed for Chapter 11 bankruptcy. In a filing, the fund said that their view is that the company should have substantial equity value with an appropriate capital structure and suggested the appointment of a special committee to oversee the bankruptcy proceedings and expressed willingness to participate in the appointment. In 2016, Wexford invested in Penn Virginia Corporation (NASDAQ:PVAC), which was also going through bankruptcy and the fund’s Marc McCarthy was appointed to the company’s board of directors following the emergence from bankruptcy.
Mr. Davidson’s fund also likes to dabble in real estate. Earlier this year. a company managed by Wexford sold a 14,000-square-foot mansion in Florida for $28 million. Last year, a partnership between Wexford and Kenco Communities obtained a $20 million loan to start developing a 73-acre project in Lantana, which will contain 275,000 square feet of retail space and over 1,000 apartments. In October, 2016, Wexford Capital, with two other companies sold the Clima Outdoor building in Miami for $13 million.
Among Wexford’s private investments is Shape Memory Medical, which recently completed a round of funding, with Wexford Capital being among the older investors that acquired stock. Two other private companies that Wexford Capital is invested in are Rebound Therapeutics Corporation and Metanor Resources, both of which have also conducted private placements recently.
In its latest 13F filing with the Securities and Exchange Commission, Wexford Capital disclosed an equity portfolio worth $1.35 billion. The portfolio is fairly diversified across sectors, although energy companies amass the largest share, around 60%. The fund also made some significant changes to its 13F portfolio during the second quarter, as it closed its position in 49 companies and added 96 new holdings. On the following pages, we are going to take a closer look at some of the energy companies that Wexford Capital is bullish on.