Plainfield Asset Management forced out of Greenwich Offices - Will Max Holmes survive?

March 28th, 2010
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Contributed 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 333 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.
For Detailed Investor Profiles on these Investors, click below:
Plainfield Asset Management LLC
Tyto Capital Partners LLC
Related People: Gregg Bresner; Joe Bencivenga*; Karen Dykstra*; Marc Sole; Max Holmes; Niv Harizman; Niv Harizman*; Rob Sherman; Thomas Fritsch
Related Entities: Plainfield Asset Management*; Plainfield Direct Inc; Plainfield Direct Master Fund; Plainfield Special Situations Master Fund; Tyto Capital Partners
Related Article Tags: Hedge Fund Fraud and Ponzi Scheme News; Hedge Fund Resources and Featured Partner News

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