03/26/10 If Hearst Newspaper Editor David McCumber Has Missed Another Greenwich Hedge Fund Story

If Greenwich Time Investigative Business Reporter Teri Buhl Had Not Been Fired By David McCumber She Would Be Reporting That Plainfield Asset Management Is Going To Return Money To Investors

Greenwich based Plainfield Asset Management, the hedge fund run by Max Holmes, is planning to wind down its current portfolio and start over with its remaining funds, The New York Post reported.

That's right if you want to know what's going on in the Greenwich business community you have to read out of town news papers like the New Ypork Post.

According to The Post, the hedge fund, beaten up during the market crisis of 2008, “is packing up its posh offices in Greenwich, Conn., and moving into its disaster-recovery offices in nearby Stamford, Conn.”

As Fortune reported in January, Plainfield currently oversees around $3.3 billion in assets, but about $2.74 billion of that is from investors who are stuck behind the gates the fund raised during the financial crisis to prevent a lightning-quick liquidation.

Mr. Holmes now plans to return the money to investors and use the remaining $500 million to “start over again,” The Post reported, citing an employee.

Run by veterans of top investment banks and staffed by well-credentialed academics, Plainfield was an archetypal hedge fund: at its peak, it held $5 billion in assets under management, and it had even signed a $7.3 million lease for its offices in Greenwich, Conn.

Fortune estimated the rent at about $80,000 per employee each year, but you would never read that in the real estate section of the Greenwich Time.

Here is some more Greenwich real estate news via the New York Post....

The move also comes as the hedge fund faces lawsuits accusing it of predatory lending practices, claims that Plainfield has denied, The Post said.

The Post, citing its sources, said that around 25 employees will move to the new Stamford office, but the hedge fund’s general counsel, Tom Fritsch, told the newspaper the number is closer to 70. At its height, Plainfield employed around 160 people, The Post said.

Where Is The Greenwich Time?

Why Isn't Hearst Newspaper Editor Covering This National News Story That Is Occurring Right Here In Greenwich?

A Lot Of Wealthy Greenwich Residents Lost Money At Plainfield.

UPDATE:

You Wont Read This In The Greenwich Time,

Because Hearst Newspaper Editor David McCumber

Screwed Up Big Time

Plainfield Hedge Fund

Hedge Fund Plainfield forced out of Lux Downtown Greenwich Office- Will Holmes survive?

By Teri Buhl

It looks like Max Holmes Greenwich-based Plainfield Asset Management is heading into ruins. Today, Kaja Whitehouse at the New York Post broke news that Plainfield is packing up and moving out of the premier hedge fund building at 100 West Putnam in downtown Greenwich. According to commercial real estate brokers we spoke with their new digs will be at 33 Ludow in Stamford. The NY Post says the hedge fund plans to take what’s left of their 70 person team into the smaller space. Plainfield is winding down their main funds and trying to return most of the 3.3 billion in assets.

What the NY Post didn’t tell you is that Plainfield has yet to find a cash rich financial service firm to take over their seven year lease, on 60,654 sq ft of space, with Antares Asset Management. Fortune Magazine reported the fund pays around $7.3 million a year for the space. We have confirmed with multiple real estate brokers in Greenwich that no sublease is signed to take over their space on the 3rd and 4th floor at 100 West Putnam. In this market, there are very few interested buyers willing to pay anywhere near the $122 sq ft price Plainfield is locked into. But here is the interesting part, according to people involved in the deal a local private real estate firm has bought up a bunch of Antares class B debt at a discount on the $160 million loan they hold on 100 West Putnam. The discounted debt buy was made with the expectation that Plainfield wouldn’t be able to afford their rent in the Antares building, would be forced to move out and sublease at a discount, thus setting up this firm with a sweet spot to negotiate. Stay tuned for more details on who’s pulling the strings in this commercial real estate move next week.

Now that Plainfield has been forced out of Greenwich, the NY Post reported that Holmes plans to start anew after Plainfield returns investors money, with the $500 million of non-gated money remaining in the firm. But according their own balance sheet they don’t even have that much money left. A copy of Plainfield’s end of 2009 financials, reviewed by this reporter, says the two non-gated funds only had $388 million in assets. The New York Post reported that Plainfield lost its CFO, Robert DeSantis, last week so maybe he decided to bail before investors filed lawsuits that could uncover the assets are not exactly the value Plainfield says they have.

On top of all that, two days ago this reporter was first to report that Plainfield’s co-founder, Niv Harizman, had left the hedge fund to start one of his own called Tyto Capital Partners. A move that leaves Holmes without his right hand tough guy negotiator. According to Harizman’s blog, he served as a First Lieutenant in military intelligence in the Israel Defense Force. A few of Plainfield’s borrowers told this reporter, he’s been the strong man who dealt with those that couldn’t pay on their hard money, high-interest loans. It’s this type of lending that has the attention of the Manhattan D.A. who is investigating the fund.

With the fund is being investigated for criminal violations involving possible lending fraud, which was first reported by Fortune in late January, and is suffering an apparent drain on cash flow — the question investors are asking is will Plainfield be forced into bankruptcy before they get their money back.

UPDATE#2:

Fortune picks up story here.

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