Goldman Sachs acquires stake in Newtown hedge-fund firm

A Bucks County-based hedge-fund manager has attracted the eye and capital of Goldman Sachs Group Inc.

Mount Lucas Management Corp., with $1.8 billion under management, said Monday that Goldman Sachs’ Petershill Offshore Fund L.P. will acquire a passive minority interest in the 34-year-old firm in Newtown. It did not disclose how big that stake will be.

However, Mount Lucas said it will “retain complete autonomy” over management, operations and investment strategies.

That means Timothy Rudderow will remain president of Mount Lucas. Rudderow, who started the firm with three other people in 1986, got a bachelor’s degree in mathematics from Rutgers University and an MBA from Drexel University, according to the Mount Lucas website.

The Goldman Sachs Petershill Fund buys minority stakes in hedge funds, which are lightly regulated partnerships that buy and sell all types of securities using strategies that may include short-selling and a high degree of leverage. Mount Lucas is the third and smallest U.S. firm in which Petershill invested during 2010.

In January 2010, Petershill bought an 8 percent stake in Shumway Capital Partners L.L.C., a Connecticut hedge fund that was managing $8 billion at the time. In April, it bought into Level Global Investors L.P., a New York firm that had $4 billion under management as of last spring.

In a statement, Mount Lucas said a “substantial portion” of the proceeds from the Petershill investment will be re-invested in its three hedge funds, including MLM Macro-Peak, which trades stocks, bonds, currencies and commodities in the markets of the Group of Seven nations.

In an unrelated move, Paul DeRosa, a firm principal involved in the day-to-day management of the MLM Macropeak, will become chairman as of Dec. 31. DeRosa assumes a position that has been vacant since the death of Frank Vannerson, another founder, in March 2008.

Robert J. Barbera, who’d joined Mount Lucas in June as its chief economist from Investment Technology Group, will take on DeRosa’s role in the management of the MLM MacroPeak portfolio.

According to its website, Mount Lucas has 25 employees, including six principals.

Debt, be gone

Just before Christmas, C&D Technologies Inc. completed a financial restructuring that cut its debt from $175 million to $50 million.

It did so by exchanging its outside convertible notes for equity in the Blue Bell maker of electrical-power storage and conversion systems. Those former noteholders wound up with 93 percent of the common stock of C&D.

Existing stockholders are left with just 7 percent, but that’s better than the 2.5 percent they might’ve received had C&D pursued a prepackaged bankruptcy restructuring.

The board of directors underwent similar upheaval. Eight of the nine members resigned after the completion of the debt-to-equity exchange offer. Chairman Kevin P. Dowd was the only board member not to resign, and he’ll be part of a new seven-member board largely picked by its former noteholders, led by Angelo, Gordon & Co., of New York, and Bruce & Co., of Chicago.

“Today begins a new chapter for C&D,” said Jeffrey A. Graves, its president and CEO. “We are very pleased that we were able to achieve our financial restructuring quickly and efficiently through this out-of-court process with minimal disruption to our business.”

Graves went on to say that C&D is on “solid financial footing” as it enter 2011.

Cold comfort to C&D shareholders, who’ve seen the stock lose 84.5 percent of its value in 2010. Shares closed Monday at 24 cents, up 7 cents or 41 percent.

Highs and lows

Renaissance Capital L.L.C., which tracks initial public offerings, is out with its best-performing and worst-performing IPOs of 2010.

Philadelphia-area companies made both lists assembled by the Greenwich, Conn. research firm. Let’s start with the bad news first: Tengion Inc., the East Norriton regenerative medicine company, went public April 8 and saw its shares lose 55 percent of their value as of Dec. 20. That placed third-worst on Renaissance’s list, behind Pittsburgh’s DynaVox Inc. (down 68 percent) and Ottawa’s Mitel Networks Corp. (down 61 percent).

On the plus side, Qlik Technologies Inc., a Radnor software developer, went public July 15 and watched its shares soar 173 percent as of Dec. 20. That was good enough for fifth-best, behind RealPage Inc. (up 197 percent), HiSoft Technology International Ltd. (192 percent), Molycorp Inc. (180 percent), and BroadSoft Inc. (177 percent).

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