Berkowitz Opens Hedge Fund, Betting Big on Stock Market
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David Berkowitz, whose Gotham Partners LP closed three years ago after investor withdrawals and a government probe, raised about $155 million for a hedge fund to invest in stocks.
Mr. Berkowitz and Joel Press, former head of global hedge funds at accounting firm Ernst & Young LLP, received $100 million from Reservoir Capital Group, a company that finances hedge-fund and private-equity firms, for their New Yorkbased Festina Lente Partners LP.
A chemical engineer by training, Mr. Berkowitz joined forces with William Ackman in 1993 to form Gotham, whose investments ranged from 26 golf courses to a bearish bet against bond insurer MBIA Inc. Mr. Berkowitz, who split with Mr. Ackman after an exodus of investors led to the closing of Gotham in 2003, said he’ll narrow his focus to picking stocks at Festina Lente.
The fund will take about five positions in various industries with holding periods of as long as four years. The partnership’s buy-and-hold strategy stands in contrast to many hedge funds, which trade frequently. Amaranth Advisors LLC, a Greenwich, Connecticutbased money manager run by Nick Maounis, shut two funds earlier this year after a single trader’s wagers on natural-gas prices resulted in billions of dollars in losses.
