Looking For Trouble

Founded in 1997 when it broke off from Schroder Wertheim, Peter Schoenfeld Asset Management (PSAM) oversees roughly $2 billion in assets. Its $1.4 billion PSAM WorldArb Partners fund seeks to exploit pricing anomalies in securities of firms involved in corporate, tax, or regulatory events -- such as takeovers, bankruptcies, liquidations, and spinoffs. WorldArb has used the uncertainty to buy debt and equity securities of some unpopular names at bargain-basement prices. The fund bought Anglo Irish Bank bonds in the summer of 2011, at a discount of up to 30%, and the bonds were paid back at par. The firm bought Bank of Ireland 2013 bonds in the high 80s last year and still holds some; those bonds are trading in the high 90s, plus a 4.625% coupon. WorldArb also bought shares of Liberty Media on the expectation that Chairman John Malone will ultimately spin off Sirius XM Radio.