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A part-time resident of Scottsdale, AZ, Jeffrey Steven “Jeff” Drobny is the founder, managing partner and chief investment officer of Garda Capital Partners in Minneapolis, MN, bringing his over twenty years of experience in the financial services industry to bear in managing a firm that has been named three times as one of the top hedge funds. While Garda Capital began as a part of Cargill subsidiary Black River Asset Management, on February 1, 2016, Black River Asset Management “spun off” Garda Capital. Jeff Drobny remains as managing partner; Garda Capital retained all its investors and continues to manage about $2 billion in assets. So, if very little changed apart from the company’s independence what does it mean when a company is “spun-off,” and why does it matter? A spin-off occurs when a firm divests itself of a portion of its business, say a specific department or a specific line of products. Typically, the value of the new company created is distributed among the former parent company’s shareholders as a stock dividend, though the company may also offer to exchange shareholders’ shares in one company for another. Spin-offs matter because the parent company and the newly independent company tend to be valued higher independently than they were together. This is, in part, due to the fact that each can better specialize. Furthermore, the parent company has fewer liabilities and therefore experiences an increase in stock value. In general, the company that is spun-off experiences a stronger increase in value than the parent company.
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A veteran financial professional with significant risk management experience, Jeffrey (“Jeff”) Steven Drobny oversees operations at Garda Capital Partners, the Minneapolis, MN-based company he cofounded in 2015. Jeff Drobny also maintains an interest in the Scottsdale, AZ, area where he has a second home. Financial risk management professionals rely more and more on computing power and technology each year, allowing algorithms to assist them as they review data and attempt to mitigate or encourage risk. Machine learning describes a category of computerized data analysis in which a computer or program appears to be learning. Instead of programming it to complete very specific functions, developers create complex algorithms that allow the machine to compile, analyze, and make use of new inputs on its own. These algorithms are especially valuable in risk management because of their capacity to recognize patterns and predict future behavior. Several large banks in Europe have already shifted from traditional statistical analysis to machine-learning based modeling. Thus far, results indicate a substantial increase in new product sales and an impressive 20 percent decline in capital expenditure. |
AuthorJeff Drobny serves as a principal and a chief investment officer with Black River Asset Management, an investment company with 13 offices in 11 countries. Archives
September 2017
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