Menu
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.
0 Comments
Leave a Reply. |
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
Categories
All
|