TAMPA — As if he doesn't have enough else going on, Tampa Bay Lightning owner, developer and philanthropist Jeff Vinik is getting back into the hedge fund business.
Vinik, 59, unveiled plans Thursday to re-launch his money management firm, Vinik Asset Management, which he ran from 1996 to 2013. Since shutting down the fund, he has focused on the Lightning and Water Street Tampa, the $3 billion real estate development project planned north of Amalie Arena near downtown Tampa.
So why now?
"Maybe it's because I'm about to turn 60, and there's something with round numbers with me," said Vinik, a career money manager who bought the Lightning when he was 50. "I love picking stocks. I love competing with the market. I've already spent three, four, five hours a day on it the last few years because I enjoy it so much, and I just got that itch that I want to get back in the big leagues of money management."
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Vinik said he sees opportunity as the markets have turned increasingly to "passive management," in which investment managers work to create portfolios that mirror particular market indexes. In that environment, someone with his approach, reviewing the fundamentals of companies with an eye on growth at a reasonable price, while understanding what's happening with the economy and markets as a whole, "can achieve strong, long-term returns," he said.
"I think stock-picking is a lost art, and good old-fashioned fundamental analysis can be very successful over the next five to 10 years," Vinik said in a telephone interview from New York, where he appeared on CNBC.
Whether the market rises or falls in the next six to 12 months may be a "coin flip," Vinik said. "I'm very bullish over 10 years, but there are always ups and downs," and he is not daunted by recent drops in stock prices. "Since in general stocks go up in the long run I'd rather start at a time when stocks are depressed a bit rather than on their highs."
Citing securities regulations, Vinik declined to say how big he aims for the fund to be, but the Wall Street Journal quoted an unnamed potential investor who said the target is $3 billion. Vinik did say he plans to invest "the majority of my liquid net worth in the fund," though, again, would not say how much that will be.
Vinik will be the fund's sole investment decision-maker, with the support of three analysts to start. Vinik also will bring back his fund's former leadership team of Mark Hostetter and Gerry Coughlin as co-presidents of Vinik Asset Management. Infrastructure support will come from Coughlin's institutional hedge fund services business, Oakpoint Advisors.
A graduate of Duke University's School of Engineering and Harvard Business School, Vinik made a reputation as a near-legendary investment manager in Boston before coming to Tampa. At 33, he was hired to run Fidelity's Magellan Fund, then the nation's biggest mutual fund. He was known for capitalizing successfully on big swings in the market, but a 1995 move into bonds backfired when stocks rose.
In 1996, he left Fidelity and started his own hedge fund, which he moved from Boston to Tampa in the summer of 2012, leasing space in the SunTrust Financial Centre building in downtown Tampa.
The hedge fund posted 17 percent annualized returns, but Vinik shut it down in May 2013 and returned billions of dollars to investors after a restructuring of the investment team led to some disappointing results. In a letter to investors, Vinik said then it was a "difficult decision" to close the fund after a rugged 10-month stretch under the new investment team. The fund's value dropped nearly 5 percent, partly because of a big bet on gold mining that didn't pay off, according to a report at the time from Dow Jones.
By then, however, Vinik had already bought the Lightning, which led him start buying property around Amalie Arena. Along the way, he teamed up with Cascade Investment, the private capital fund for Microsoft billionaire Bill Gates. Together, they launched Water Street Tampa, a 53-acre project that will include a new home for the University of South Florida Morsani College of Medicine and Heart Institute, three Marriott hotels, downtown Tampa's first new office towers in more than 25 years, four residential projects and Sparkman Wharf, a re-invention of the old Channelside Bay Plaza entertainment complex.
The Vinik-Cascade team, known as Strategic Property Partners, broke ground on four projects in 2018 and expects to start work on six more this year, employing thousands of hard-hat workers in an expansion of the city comparable to the arrival of Henry Plant's railroad.
"Twenty-some (construction) cranes will be swinging at the end of next year," Strategic Property Partners CEO James Nozar said this week.
Vinik, however, tends not to be involved in the small details of the project, preferring instead to "hire good people, let them do their jobs, don't micro-manage them."
And while Vinik Asset Management has been dormant, Vinik has remained an active individual investor on a variety of fronts, including:
• Taking stakes in ventures such as Silk Inc. of Boston, which formulates non-synthetic chemicals for the skin care and textile industries; Hissho Sushi in Charlotte, N.C., which supplies supermarkets, cafes and universities; Delos, a New York real estate company that builds health and wellness strategies into its projects; StemRad, an Israeli company that makes radiation protection gear for soldiers, first responders and astronauts; Turtle Beach, a leading maker of video game headsets; and aXiomatic, a gaming and esports company based in Los Angeles. Vinik also is part of FBN Partners, a group of local investors who in 2017 loaned $12 million to Times Publishing Co., which owns the Tampa Bay Times.
• Putting $10 million into establishing Embarc Collective, a new innovation hub a few blocks north of Amalie Arena, and $12 million into Dreamit Ventures, a tech accelerator that works with startups in health care, security and urban tech approaches to real estate, design and development.
• Donating, since 1997, more than $75 million to nonprofits working in education, human services, health care and the arts through the Vinik Family Foundation.
• Contributing, personally or through his companies, $785,000 to All for Transportation, which successfully put a referendum on the ballot and won passage in November for a 1-cent increase in Hillsborough County's sales tax. The new tax revenue will be earmarked for expanded bus service and transit and in traffic network improvements.
Vinik typically works about 100 hours a week and he doesn't expect that to change, though he anticipates spending more than half and maybe significantly more than half of his time on the hedge fund. That said, he doesn't plan to walk away from any of his local endeavours.
"I am every bit as much engaged and passionate about Tampa Bay now as I was before I took over this portfolio," he said. "Maybe that's why now. I have this great team in place. They can focus on all these initiatives, and I can focus on this new fund and new portfolio."
Contact Richard Danielson at firstname.lastname@example.org or (813) 226-3403. Follow @Danielson_Times