S. Donald Sussman wins 40% stake, PAAMCO considers appeal

October 11th, 2010
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Pacific Alternative Asset Management Co (PAAMCO), the $9 billion fund of hedge funds manager based in California, is considering an appeal after a district court’s decision awarded hedge fund seeder S. Donald Sussman a 40% equity stake in the firm. According to the Wall Street Journal, in 2000 Mr. Sussman provided Jane Buchan, James Berens, Judy Posnikoff and William Knight with seed capital to start their fund in exchange for a promise of a 40% stake in the firm’s holding company.

However, PAAMCO recorded Mr. Sussman’s contribution as a convertible loan and later argued that the loan facility could not be converted into an equity stake in the firm. Mr. Sussman took PAAMCO to court in March of 2009.The memorandum and order also ruled that the fund of fund manager owes Mr. Sussman $19 million in outstanding interest. PAAMCO has thirty days to appeal the decision.

S. Donald Sussman is the President of the Paloma Funds , a multi-strategy hedge fund manager that he founded in 1981. The firm's funds employ various quantitative, relative value and computerized statistical arbitrage strategies.
For Detailed Investor Profiles on these Investors, click below:
Pacific Alternative Asset Management Co
Paloma Funds
Related People: James Berens; Jane Buchan; Judy Posnikoff; Lauren Rose; S. Donald Sussman; S. Donald Sussman; William Knight
Related Entities: PAAMCO Asia; PAAMCO Europe; MAK Capital One LLC; PAAMCO; Paloma International LP; Paloma Partners Company LLC; Paloma Securities, LLC; Sunrise Partners LP; Trust Asset Management LLP; Xaraf Management LLC
Related Article Tags: Multi-Strategy, Long Short, Equity, Debt and Global Macro Hedge Fund News


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