Anchorage Capital Group (or simply Anchorage) is an American

investment management Investment management (sometimes referred to more generally as financial asset management) is the professional asset management of various Security (finance), securities, including shareholdings, Bond (finance), bonds, and other assets, such as r ...

firm based in

New York City New York, often called New York City (NYC), is the most populous city in the United States, located at the southern tip of New York State on one of the world's largest natural harbors. The city comprises five boroughs, each coextensive w ...

. The firm is known as one of the world's most prominent

vulture fund A vulture fund is a hedge fund or private-equity fund that invests in debt considered to be very weak or in default, known as distressed debt. Investors in the fund profit by buying debt at a discounted price on a secondary market and then u ...

s, which are funds that invest in

distressed securities In corporate finance, distressed securities are security (finance), securities over companies or government entities that are experiencing Financial distress, financial or operational distress, Default (finance), default, or are under bankruptcy. ...

Background

Anchorage was founded in 2003 by Kevin Ulrich and Tony Davis. Both previously worked in the distressed-debt business of

Goldman Sachs The Goldman Sachs Group, Inc. ( ) is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered in Lower Manhattan in New York City, with regional headquarters in many internationa ...

. The firm received $100 million in

seed money Seed money, also known as seed funding or seed capital, is a form of securities offering in which an investor puts capital in a startup company in exchange for an equity stake or convertible note stake in the company. The term ''seed'' suggest ...

from Reservoir Capital Group. Later on, Davis left the firm to start Inherent Group, which focused on ESG investments. In December 2021, Anchorage announced it would close its $7.4 billion credit flagship fund (ACP Capital) due to lackluster returns and difficulties in markets such as distressed securities. The firm moved on to focus on investments related to

structured finance Structured finance is a sector of finance — specifically financial law — that manages Leverage (finance), leverage and Financial risk, risk. Strategies may involve legal and corporate restructuring, off balance sheet accounting, or the use of ...

, such as

collateralized loan obligation Collateralized loan obligations (CLOs) are a form of securitization where payments from multiple middle sized and large business loans are pooled together and passed on to different classes of owners in various tranches. A CLO is a type of colla ...

s, as well as

private credit Private credit is an asset defined by non-bank lending where the debt is not issued or traded on the public markets. "Private credit" can also be referred to as " direct lending" or " private lending". It is a subset of "alternative credit". E ...

. At the same time, co-founder Ulrich announced he was stepping down from his role as CEO to a new role as chairman. One potential factors that led to this, apart from the firm's recent performance, was that in 2019, Ulrich was sued by a woman accusing him of

sexual assault Sexual assault is an act of sexual abuse in which one intentionally Physical intimacy, sexually touches another person without that person's consent, or Coercion, coerces or physically forces a person to engage in a sexual act against their w ...

in a Manhattan hotel. The complaint was withdrawn later after Ulrich settled with the accuser, but the firm's clients were displeased with the firm's failure to disclose the allegations after they appeared on

public record Public records are documents or pieces of information that are not considered confidential and generally pertain to the conduct of government. Depending on jurisdiction, examples of public records includes information pertaining to births, deat ...

. Anchorage is headquartered in New York City and has an additional office in London. Although Anchorage mainly invests in distressed securities of companies such as Eir and New Look, in recent years it has been involved in funding

startups A startup or start-up is a company or project undertaken by an Entrepreneurship, entrepreneur to seek, develop, and validate a scalable business model. While entrepreneurship includes all new businesses including self-employment and businesses tha ...

and early stage companies such as Brat TV, Eko and

SingleStore SingleStore (formerly MemSQL) is a Distributed database, distributed, Comparison of relational database management systems, relational, Structured Query Language, SQL database management system (RDBMS) that features ANSI Structured Query Language, ...

Notable deals

MGM Studios

One of the most notable deals Anchorage was involved in was investing $500 million in

MGM Studios Metro-Goldwyn-Mayer Studios Inc. (also known as Metro-Goldwyn-Mayer Pictures, commonly shortened to MGM or MGM Studios) is an American film and television production and distribution company headquartered in Beverly Hills, California. Metro ...

in 2010 to bring it out of bankruptcy. Ulrich joined its board in 2010 and became chairman in 2017. During the period Anchorage held MGM Studios, it had to fight off efforts by activist shareholder

Carl Icahn Carl Celian Icahn (; born February 16, 1936) is an American businessman and investor. He is the founder and controlling shareholder of Icahn Enterprises, a public company and diversified conglomerate holding company based in Sunny Isles Beach, ...

to take control the Studios.

Gary Barber Gary Barber (born 1957) is a South African and American film producer. Barber was the chairman and CEO of Metro-Goldwyn-Mayer. He is also co-founder of Spyglass Media Group. Biography Barber was born to a Jewish family in Johannesburg, South ...

was brought in by Ulrich to become CEO in 2010 but a rift developed between the two. In October 2017, Barber received a contract renewal for five years until 2022. Several months later, he was fired and given a $260 million

severance package A severance package is pay and benefits that employees may be entitled to receive when they leave employment at a company unwilfully. In addition to their remaining regular pay, it may include some of the following: * Any additional payment based ...

. Barber was never replaced and in the interim, the company was led by the newly formed "Office of the CEO". In 2021, MGM studios was sold to

Amazon Amazon most often refers to: * Amazon River, in South America * Amazon rainforest, a rainforest covering most of the Amazon basin * Amazon (company), an American multinational technology company * Amazons, a tribe of female warriors in Greek myth ...

for $8.45 billion which resulted in a $2 billion profit for Anchorage.

J.Crew

On May 4, 2020, J.Crew announced that it would apply for

bankruptcy protection Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the deb ...

amidst the

COVID-19 pandemic The COVID-19 pandemic (also known as the coronavirus pandemic and COVID pandemic), caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), began with an disease outbreak, outbreak of COVID-19 in Wuhan, China, in December ...

. On September 11, 2020, it was announced that J.Crew had exited bankruptcy after an investment from Anchorage.

Disputes

In 2013,

BNP Paribas BNP Paribas (; sometimes referred to as BNPP or BNP) is a French multinational universal bank and financial services holding company headquartered in Paris. It was founded in 2000 from the merger of two of France's foremost financial instituti ...

sued Anchorage Capital after it agreed to purchase $60 million worth of debt from Irish Bank Resolution Corporation and then failed to pay. The court ruled in favour of BNP Paribas.

References

External links

Official website
{{authority control 2003 establishments in New York City Financial services companies established in 2003 Hedge fund firms in New York City Investment management companies of the United States Privately held companies based in New York City