Former Hedge Fund Manager Traci Lerner Strikes Gold in Altria Pot Deal
Former Hedge Fund Manager Traci Lerner Strikes Gold in Altria Pot Deal
(Bloomberg) -- Traci Lerner’s $1.4 billion hedge fund, one of the few to be run by a woman, shut two years ago as the wake of the 2008 financial crisis created a hostile environment for investing other people’s money.
Lerner turned the fund, which she started with her husband in 1991, into a family office to manage her own wealth. Her former investors probably wish she hadn’t.
Her biggest publicly disclosed equity holding, pot producer Cronos Group Inc., surged as much as 33 percent Friday after Marlboro cigarette maker Altria Group Inc. took a stake in the Canadian company.
Lerner’s Chescapmanager LLC had been Cronos’s biggest investor with roughly 9 million shares at the end of the third quarter, after acquiring them for an estimated $4.15 apiece. The stock rose to $12.94 at 1:22 p.m. in New York, giving Chescapmanager a gain of about $79 million on its investment.
Lerner, whose firm followed an event-driven strategy, wagering on corporate actions such as takeovers and bankruptcies, declined to comment.
She’s not the only one rolling in more green.
The largest individual shareholder, Cronos board member Jason Adler, added $17.8 million to his fortune on Friday, bringing his stake in the firm to $125.3 million, including the value of unexercised stock options. Adler is managing partner of New York-based Gotham Green Partners, a private-equity firm that invests in cannabis companies.
Cronos Chief Executive Officer and Chairman Michael Gorenstein, 32, added $4.33 million on the day, boosting his holding to $60.6 million, including options.
Other winners include investors Moshe Azogui and Andrew Garnock, who were early backers of Cronos predecessor PharmaCan Capital Corp. Their stakes are worth $81.5 million and $67.3 million, respectively, filings show.
--With assistance from Kristine Owram.
To contact the reporters on this story: Brandon Kochkodin in New York at bkochkodin@bloomberg.net;Reade Pickert in New York at epickert@bloomberg.net
To contact the editors responsible for this story: Joe Weisenthal at jweisenthal@bloomberg.net, Peter Eichenbaum, Pierre Paulden
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