Money magazine recently profiled hedge fund star Cara Goldenberg, who at 30 years old, is the founder and managing partner of Permian Investment Partners, a New York hedge fund she launched in 2008.
Goldenberg is unique in that she didn’t follow the usual analyst-business school route to a hedge fund job. She did begin her career as an analyst at Morgan Stanley in the investment banking division. But her strong quantitative skills led to her recruitment by hedge fund firm Highbridge Capital Management. Later, during an investor meeting, the management team at Brahman Capital was so impressed by Goldenberg’s questions that they hired her away from Highbridge.
Goldenberg credits her early focus on following “brilliant management teams” as one key to her success, especially when she was working for Highbridge looking for European opportunities. “I was hardwired to look at things the way they did. I was looking at a universe of European companies that were mismanaged and had depressed earnings. They had cost-cutting and capital allocation opportunities that were far better than their U.S. counterparts. But their share prices didn’t reflect that potential. We knew that the right management teams could turn these companies around. And no one else was terribly interested in them,” she said.
Fluent in English, French and Italian, Goldenberg later searched for special situations in Europe for Brahman, where she was one of the first to uncover the potential of Sergio Marchionne moving to Fiat as the new CEO. She knew his track record for creating value for companies in Switzerland. He had worked at GE as well. She saw the opportunity for seeing what this “philosophically smart” CEO could do at Fiat, especially after he proved he had the complete support of Fiat’s Board. She built Braham’s stock position in Fiat, which later turned out to be the biggest profit generator in the firm’s history.
“This management-driven philosophy allowed me to follow the most intelligent, successful and capable people in the world,” Goldenberg said. “It allowed me to be contrarian. It made me excited to work harder and expand the team.”
It’s a philosophy she has followed with her own firm, Permian Investment Partners, investing in quality CEOs much the way others invest in hard assets. It has enabled her to be successfully contrarian in many of her firm’s investments.
You can read the full interview at Money online. Meanwhile, what do you think of her approach of following-the-CEO or top management team? Add your comments below.