Weinstein Co. Burns Funds From Baupost to Highbridge
Buy an equity stake in an upstart film company with a knack for making money at the box office, sounds like an idea?
(Bloomberg) -- It seemed like a good idea at the time -- buy an equity stake in an upstart film company founded by two gutsy New Yorkers with a knack for making money at the box office.
That was in 2005 when Goldman Sachs & Co. was raising money to help producers Harvey Weinstein and his brother, Robert, open a new movie studio. This week, as Weinstein Co. filed for bankruptcy, it became clear that a group of hedge funds and other big-name money managers were among those who lost money betting on the duo.
Hedge fund firms including Baupost Group, Eton Park Capital Management and Highbridge Capital Management are listed among the equity security holders in the filing, which came after the company was hobbled by more than 80 sexual harassment claims against Harvey Weinstein. He denies any non-consensual sex.
Maverick Capital, run by Lee Ainslie, and Highbridge, founded by Glenn Dubin, bought a small share of the firm. Both men sat on the board of anti-poverty charity Robin Hood Foundation with Harvey Weinstein. London-based GLG Partners also purchased shares. Eton Park, a hedge fund run by Goldman alum Eric Mindich, bought more than 4 percent of the company. In all, Goldman raised $490 million, more than expected.
Seth Klarman’s Baupost ended up with a 1.4 percent stake in the Weinstein firm in 2011 when it bought a portfolio of private investments that included the production company, according to a person familiar with the firm.
The hedge fund managers were not the biggest losers. Fidelity Investments and Wellington Management Co. were the largest minority buyers. They doled out $50 million each for a 5.5 percent stake each, according to press reports at the time.
Representatives for the firms declined to comment or didn’t return calls seeking a comment.
--With assistance from Sabrina Willmer and Katia Porzecanski
To contact the reporter on this story: Katherine Burton in New York at kburton@bloomberg.net.
To contact the editors responsible for this story: Margaret Collins at mcollins45@bloomberg.net, Alan Mirabella
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