On Sunday morning, around 200 hedge fund employees received a mass email about an activist position in one of the world’s biggest asset managers, Och-Ziff Capital Management. The note came from an unusual source, a man identified only as Michael Young, who wrote from a…
On Sunday morning, around 200 hedge fund employees received a mass email about an activist position in one of the world's biggest asset managers, Och-Ziff Capital Management.
The note came from an unusual source, a man identified only as Michael Young, who wrote from a personal Gmail account.
Young's goals for Och-Ziff were straightforward:
"I. Focus Och-Ziff's attention on increasing tangible book value.
"II. Help Och-Ziff develop an automated trading strategy to decrease human emotion and improve investing performance. This will also increase profit margin by requiring fewer traders to execute trades.
"III. While continuing to focus their attention on tangible book value and investing performance, we will advocate for the sale of Och-Ziff Capital Management to a buyer who can manage the business better."
But one question remained: Who is Michael Young?
Business Insider wasn't included on the email chain, which included Citadel, Eton Park, and DE Shaw, among other top funds. One of the recipients asked if we could find out more.
Young, it turns out, is a 24-year-old Chipotle cook in San Jose, California, who dreams of becoming an investor full time, he told Business Insider in a phone call.
He realizes that in the world of asset management, his investment is small potatoes. For the Och-Ziff stake, he cobbled together $1,000 of his savings — a situation he compared to David and Goliath. Och-Ziff manages $39.2 billion.
But by sharing his thesis with some of the top minds in finance, he figured he might band together others who would in turn advocate for change, too.
"I wanted to use my voice in order to draw attention to what the company has not been doing over the years," Young told Business Insider.
One of Young's points is that Och-Ziff should up its game in quant trading — letting computers make buy and sell decisions — which it doesn't currently employ. Otherwise, he said, it would fall behind its competition.
This is the first time Young has made such a big move announcing his position, he said.
"There are a lot of companies that need owners to come in and say, 'Listen, we all together own the company,'" he said. "We all need to come together and say if we want change — let's lay it out."
He manages his day job with his passion for investing by pulling all-nighters researching investments.
"If I get off work at 11 p.m., I'll stay up until 5 or 6 a.m. or so, just making sure I'm not missing anything with the numbers," he said.
Young got into investing at age 19, when he read "The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance." Since then, Carl Icahn and Warren Buffett have become his idols.
"The same rules that Icahn and Buffett abide by — these are the principles I carry," he said.
Would he like to work for a fund one day?
That wasn't the purpose of the email, he says, but it certainly crossed his mind.
"Right now, the answer would be yes," he said. "That would allow me to ... learn more from the people I look up to."
A spokesman for Och-Ziff declined to comment.
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