Trying to find a Young Bill Ackman -The Origami Challenge – A Private Equity Contest For Alternative Investment Ideas

The other day I was thinking about a Bill Ackman presentation given at the Invest for Kids Conference in 2009-2010. He mentioned creating a REIT for single family homes. I don’t think Single Family REITS were launched but many private equity funds did execute on Bill’s idea and have been buying portfolios of distressed single family homes.

I started thinking that it would be cool if there was a forum for people to propose alternative investment ideas. Then, I became friends with some people at Origami Capital in Chicago who are taking this approach with a competition called the Origami Challenge.  Below is some information about the challenge. If you are a fan of the cash giveaways of the Value Investors Club then you might like this investment competition. Reminder: This challenge has just finished they will be launching the next challenge later this summer.

The Founders:

Origami Capital Partners is a Chicago-based investment firm with committed capital of $680 million. The firm, which was founded in 2008, specializes in innovative, niche investment strategies. To date, Origami has been one of the largest buyers of secondary interests in hedge funds, having acquired interests with a net asset value of more than $1.3 billion. Origami is structured as a private equity fund with capital that is committed for up to nine years. Consequently, it is able to help identify unusual but significant market opportunities that require a number of years to come to fruition.

Historically, Origami has been a buyer of hard-to-sell assets and a provider of liquidity. To date, Origami has provided capital to sellers of illiquid investments who wanted money immediately; Origami’s strategy has been to wait patiently for recovery of value in these illiquid investments. That is “old news.”

Origami has sought to invest in niche areas, where few others have been investing. With these ideas in mind, we have avoided venture capital (i.e., funding a new technology or operating business), leveraged buyouts, private lending, or outright purchases of real estate or commodities. In our view, these are areas where there are many talented, well-capitalized investors. However, we could be interested in these areas if a novel approach or circumstance yielded a competitive advantage.

What is The Origami Challenge

We like different, unconventional, and “crazy” ideas. Origami’s current investment focus, purchasing secondary interests in hedge funds, was an application of an old idea (secondary purchases) to a new area (hedge funds). There may be other opportunities to apply old ideas to new areas, new ideas to pre-existing strategies, or completely new ideas involving new markets. Typically, a good idea should solve a legitimate problem. Also, some of the most successful investment strategies historically have involved a key insight about the macroeconomic environment.

What Types Of Ideas Are Acceptable

1. Broadly defined, the investment opportunity should be large enough to absorb $100 million of capital and last at least a year. Investments can include any asset class or geographical location.

 

2. We are seeking repeatable types of investments, as opposed to a specific asset purchase opportunity that will change quickly. For example, we would consider buying properties from the Resolution Trust Company in 1989 to be a strategy, (great idea!) but buying a specific public stock at today’s price as a one- time “trade”(too specific).

The Prize

Origami is awarding $130,000 in prizes. The Final round winner will receive a $50,000 cash prize and could receive a consulting contract or an employment opportunity with Origami Capital Partners. Each of the 8 division winners will receive a $10,000 cash prize, and entry into the Final round.

How You Can Learn More About The Origami Challenge

I recommend visiting the Origami Challenge website at: http://origamichallenge.com/

About Miguel Barbosa

I run this site.

06. June 2013 by Miguel Barbosa
Categories: Finance & Investing | Leave a comment

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