Muffie on Markets

Muffie Benson-Perella (muffie AT muffmarkets.com) was an Associate in the Investment Banking Division of a “Bulge Bracket” bank. She holds a B.A. in French and Art from Vassar College and an M.B.A. from Harvard Business School. She concentrated in Contemporary French Poetry at prep school where she was awarded the exclusive premiership of the school’s “French Club.” Today, Ms. Benson-Perella is the Founder and Managing Director of “Muffie on Markets” (http://www.muffmarkets.com), a deep dive into capital markets, finance and investment strategy. She is also the Founder and Managing Director of Muff Cap, LLC., an invitation only, private investment vehicle for prestigious and accredited investors only, employing an actively managed, long-short strategy.

Setting up a hedge fund can be a daunting task. Of course, the first issue is the money. Seed capital is used to pay attorney’s fees to form the underlying entities. Accountants have to be retained. Brokerage accounts opened. Dinners to be consumed with people important to business development. All that sort of thing. Only after all that has been completed and everything is in place can you work on putting together a strategy for investment. A few of the attorneys whined about this since the strategy discussion had to go into the placement memorandum, but we solved that by keeping it very vague and open. In any event, just because I like a particular strategy doesn’t mean Bess, my other portfolio manager, is going to adopt the same one.

This strategy part has been the most difficult, actually. But, after long consideration, I have elected to adopt a long-short equity strategy. Over and above that, I have elected to avoid particular holding periods, particular concentration (or diversity) requirements and particular sector, market capitalization or other restrictions on potential investments. I really don’t want any restrictions that will prevent me from capitalizing on a good opportunity.

After having some strategy discussions, I have elected to put $1.25 million of the original seed money into Bess Levin’s portfolio. She has a deeper insight into the media and entertainment worlds than I do. Going along with Jim Cramer’s “Invest in what you know,” advice, that will be her focus.

And so, things begin. This week will mark MuffCap’s initial entry. Stay tuned!