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Is Bronson Point the New Sponsoring Club For American Retail?

|Includes:AMZN, COKE, COST, JWN, KO, Macy's Inc. (M), MCD, PAS, PEP, PG, SJM, WFM, WMT, YUM

All we have to say is one must think hard about the retail story and in larger terms the Lifestyle Economy story.

To start at the beginning, It is obvious that the recession was kind on McDonalds ( $MCD) and maybe YUM brands ( $YUM) could have suffered some more but didn't and finally now as McDonalds but groceries are cheaper now in the US and this small honeymoon with the markets is now over even as same store sales did rise in Europe 2.5% ( To me, that number is still too low, sigh!) 

One must then look at the real lifestyle economics' story. Thanksgiving went by and only Nordstrom performed better than expectations. The great Macys' efforts with a half  a billion in restructuring came to nought

In confectionary markets,  Kraft is budgeting hard even with a hostile bid for a hyper-growth story like Cadbury's and Proctor & Gamble has sold off its coffee Folgers. The pain is showing everywhere. P&G and Unilever are in the midst of tight non growth markets, when worldwide this segment of food retail and other lifestyle will be the one that will outgrow everything else. Margins might improve too but it is too soon to tell.

One last section I must consider right now is whole foods, the green community like Whole Food Markets that grew pretty well till 2007
 
To recap while everyone knows retail has had a sad sad start to the 21st century with Circuit City, some Office Depot a lot of Macy's in 2009, Saks and other UK stores like Sainsbury's , almost everything except Amazon and Walmart..

This is an ideal opportunity for hedge funds to come out and prove their 'utility' to the financial markets at large. A new version of Privat e Equity if you will. But Financial stewards that understand the retail pulse and the costs of restructuring. Bronson point's ;launch could be a god send to Macys Elie and Ellen at Kraft, I am sure Ben and Warren Buffet would agree. Yes, Buffet too.

These Financial stewards are knocking at the doors right now. As usual some of them made money during the recession, but making no bones, simply put it has been a tough time for them too. Investors are touchy and this sector has a very bad report card in Financial skirmishes, whether it be legacy or greens in the diet. 


Is This The New Sponsoring Club For American Retail? | Reuters & Bronson Point


This post is mostly a reuters story soon to make it to major dailies in the print edition as well.  Read us at the Advantage zyaada US blogs (O'nomics)



 Two hedge fund veterans who worked at SAC Capital Advisors, LP and Pequot Capital Management, long considered among the industry's most successful, are launching their own firm next month, people familiar with the matter said on Monday.

Larry Foley, who had been a senior portfolio manager at SAC from 1994 to 2008, and Paul Farrell, a member of Pequot's executive committee and co-portfolio manager of its Scout Fund Group, plan to open Bronson Point Partners on January 1, 2010.

Foley and Farrell’s pedigree will likely prompt many hedge fund industry investors to give the pair a close look. But how much money the men will actually manage to raise remains unclear at a time when investors are becoming ever pickier about where they commit their capital.

To woo potential clients, Bronson Point’s principals said they have committed at least $25 million of their own money and promise a “disciplined approach to fund-raising, organic growth and risk management.” They will concentrate on U.S. stocks, running a so-called long/short equity strategy.

Investors traditionally want to see fund managers invest part of their own fortunes, with plans to expand the fund in a measured way.

To get into Bronson Point, investors need to put down $1 million, an average figure for most small hedge funds. It will charge a 2 percent annual management fee plus an incentive fee of 17 percent to 20 percent, depending on how long investors agree to leave their money with the new firm.

Bronson Point in its brochure promises to use an “opportunistic approach combining fundamental research and active portfolio management.” The team, which also includes ex-SAC trader Jonathan Marcus, said retailer Bed Bath & Beyond (BBBY.O) and regional sporting goods store Hibbett Sports (HIBB.O) are among the fund's core holdings.

via Ex-SAC, Pequot managers to launch hedge fund firm | Reuters.



Disclosure: We have no positions in the stocks mentioned but would be recommending them to all potential clients and friends
Stocks: M, MCD, YUM, KO, PEP, PAS, COKE, PG, SJM, JWN, AMZN, WMT, COST, WFM