Tampa Bay Lightning
Vinik vows to remain active in Tampa despite fund closure
The Tampa region can expect to see a lot more of Lightning owner Jeff Vinik in the coming years.
Vinik may be shutting down his namesake hedge fund, but rather than go into seclusion, he plans a host of new projects around town, from developing the neighborhood around the Forum where his hockey team plays, to a new focus on philanthropy, and helping his former employees start new companies and land on their feet.
Vinik laid out the broad strokes of his vision to The Tampa Tribune on Thursday, particularly with his neighborhood in downtown.
“We want to make this place an area where residents of the whole Tampa Bay can come to enjoy,” he said. “Barring a recession, we feel pretty good about what's ahead of us.”
Perhaps the first area of work will be two large parking lots on both the east and west side of the Forum. Right now, they are used for parking during game time, and overflow parking for the Marriott Waterside hotel. In the future, the spaces could transform much more into hubs of an entertainment neighborhood around the Forum – something that links the Forum on the West with Channelside Bay Plaza on the East.
Some of those plans have been in the works for several years, but Vinik said now he'll have the chance to focus on them and move forward, if carefully.
“We've gone from master planning our master plan to actually master planning,” Vinik said chuckling, while sitting at the head of a large conference table in the Forum offices. “We want to be thoughtful here. We have big dreams, and a lot of different opportunities ahead of us, but we want to be thoughtful and careful about what we are doing.”
Vinik also has ownership stakes in property north of the Forum, which many have considered a likely site for a potential baseball stadium.
“The good news or the bad news is that this area has the potential to be a lot of different things,” he said. “The bad news is I can't give you an answer what specifically it's likely to look like here, because we don't know yet. But we see plenty of opportunity. As for the baseball, quite simply not on my radar, right now.”
As for what hurt his hedge fund, ironically it was a rising stock market lately, Vinik said. Typically, hedge funds are high-risk, high-reward projects that thrive in a volatile market where stocks are moving in different directions.
“Markets that go straight up surprisingly are the most challenging for us,” he said. “Because we like volatility where we are able to take advantage and purchase more stocks when the market goes down, and sell when the market goes up.” The Dow Jones Industrial Average just rose above 15,000 for the first time. And if the overall market is rising 20 percent a year, there's less interest among investors to put money into a higher-risk hedge fund that may only rise at that same pace.
Though much of Vinik's own net worth is tied up in his fund, he said outside investor money made up the vast majority of the overall fund. By June 30, Vinik will liquidate everything and return remaining assets to outside investors.
Kyle Vataha studies hedge fund values for Los Angeles-based Pluris Valuation Advisors, and said a slew of funds have closed in the last year. Taxes have gone up on income from hedge funds, and there's more regulatory scrutiny of funds, including some high-profile insider-trading scandals.
“Before, you could be a good investor, raise some capital, work in a small team and succeed,” Vataha said. “Now it's just a lot harder to go about that business.”
What happens next is a split among the 50 employees of Vinik Asset Management.
One group that's still based in Boston will remain there and start up a new hedge fund, focusing on bets that certain stocks will rise or fall, a so-called long/short fund, led by Doug Gordon, Jon Hilsabeck and Don Jabro. Another group will start a new fund, likely based in Tampa, that will focus on only “long” bets that stocks will rise, led by Dave Iben. A third company will likely start operations in Tampa to offer back-office services to other hedge funds, like marketing and technology, led by Gerry Coughlin.
Vinik said he's serious about making sure the 50 current employees are taken care of, and estimates the three projects will hire about 40 people. The other 10, “I will do everything I can in my power to help all those who don't have a job post June 30th to find a great opportunity.”
As for the Lightning hockey team, Vinik said he foresees no major changes there, as he likes the current management team he's put in place.
The change will also let Vinik spend more time thinking about philanthropy and his family's charitable work. For some time, they've given money to various causes and groups, but there hasn't been an overriding philosophy.
“Frankly, myself and my wife have been so busy that we haven't been able to get that specific with respect to it,” Vinik said. His wife Penny has joined the Tampa Museum of Art board of directors, and Vinik complimented current leadership there. “This will free up time to really put more thought into my foundation, and make sure we are achieving as good of outcomes as we can.”
At the end of the interview, Vinik added one other project he wants to focus on.
“I'd like to get back in shape,” he said chuckling. It's been three years since he's had a chance to really work out.
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