Mudrick Capital Management
| Company type | Private |
|---|---|
| Industry | Investment management, Hedge fund |
| Founded | 2009 |
| Founder | Jason Mudrick |
| Headquarters | New York City , United States |
Key people | Jason Mudrick (Chief Investment Officer) |
| Products | Special situations and event-driven investment strategies, distressed securities funds |
Mudrick Capital Management is a United States-based investment firm and vulture fund that concentrates on special situations and event-driven investment strategies, particularly involving distressed securities. Established in 2009 by Jason Mudrick, who remains the Chief Investment Officer, the company operates out of New York City and managed roughly $3.3 billion in assets as of June 2022.
The firm focuses on opportunities arising from corporate events such as balance sheet restructurings, asset divestitures, or shifts in corporate strategy to exploit undervaluation gaps.
History
In 2016, the Distressed Opportunity Fund managed by Mudrick Capital achieved the top position on Bloomberg’s list of highest-performing large hedge funds, delivering a 38.7% return.
By September 2017, Mudrick Capital transformed its 15.3% holding in Verso Corporation, a paper manufacturing firm, into an activist investment due to dissatisfaction with the board’s handling of underperformance. Verso responded by establishing a strategic alternatives committee and experienced the resignation of its chairman; following these changes, Mudrick reverted to a passive investment stance.
In May 2018, Mudrick initiated legal action against satellite communications provider Globalstar, where it owned 5.6%, challenging an inflated $1.65 billion merger proposal with FiberLight LLC. This merger was subsequently called off in August 2018.
In September 2018, alongside HG Vora Capital Management, Mudrick successfully outbid Blackstone Group LP to acquire LaSalle Hotel Properties for $5.2 billion, surpassing Blackstone’s all-cash offer of $4.8 billion.
Mudrick was among the leading hedge funds in 2019, posting a 28.8% return largely driven by its 51% stake in NJOY, which it purchased near bankruptcy in 2017; by that time NJOY’s sales had increased over elevenfold year-over-year.
In January 2021, Mudrick reported gains of $200 million (9.8%), primarily from debt and equity option positions in AMC Entertainment Holdings, Inc., after providing AMC with $100 million in financing through bonds and shares. The firm also converted $100 million of AMC bonds into nearly 14 million additional shares. AMC’s stock price surged amid retail investor enthusiasm on Reddit. Unlike many hedge funds, Mudrick did not short AMC but instead supported the company financially, earning goodwill among retail investors.
Also during January 2021, Mudrick broadened its European footprint by acquiring a credit hedge fund formerly owned by CVC Credit Partners.
In April 2021, Mudrick Capital Acquisition Corporation II, a publicly traded SPAC, agreed to take trading card manufacturer Topps public at a valuation of $1.3 billion. Michael Eisner's The Tornante Company rolled its equity stake into the new entity while Mudrick led an additional $250 million investment round. That same month, Topps released its inaugural NFT collection featuring NFL draft pick Trevor Lawrence, which generated sales totaling $225,000.
Funds
Since its inception in 2009, Mudrick Capital has launched several funds dedicated to special situations investing, including:
- Mudrick Distressed Opportunity Fund
- Mudrick Distressed Opportunity Drawdown Fund
- Mudrick Distressed Opportunity Specialty Fund
- Mudrick Distressed Energy Co-Investment Fund
- Mudrick Distressed Senior Secured Fund Global
- Mudrick Distressed Opportunity Fund II and its Supplemental Capital
- Verto Direct Opportunity and Verto Direct Opportunity II