Breeden Hopes to Win the Name Game

"My guess is that he'll have trouble raising money without a managing background," says a manager at a special situations hedge fund who preferred to remain anonymous.

Breeden was traveling and did not return repeated calls seeking comment.

Having hedge fund experience is also important in garnering new capital. Breeden has no such experience. But neither did Carl Icahn when he launched his High River partnership last year. "Yes, but Icahn has an incredible track record managing his own money," says Goldstein. "He is one of the greatest investors and he's done it through activism."

Breeden's new fund, to be managed out of Greenwich, Conn., is called Breeden Partners, according to sources who have heard about the launch or been pitched the fund. It is an activist hedge fund looking at value stocks -- although the fund's unofficial marketing brochure says that the managers are "active, not activists."

But activism is how people who have been briefed on, or heard of, the startup perceive the fund's philosophy. And if there is any doubt, the document says that the fund will "seek superior returns" by investing in companies where:

management policies or performance have resulted in diminished enterprise value,

and the fund can serve as an effective catalyst for eliminating value-diminishing policies through active engagement in governance or other active measures.

Moreover, the concentration of the portfolio (comprised of 6 to 12 companies) and the ownership percentage (up to 10%), should also help alleviate any ambiguity. The fund is also ambitious in its performance goals with a target gross rate of return of 50% for each investment.

If it quacks like an activist fund, it probably is an activist fund.

As hedge funds are reaching out for new ways to make returns, activism has recently been one of the most successful avenues. Unlike a global macro or long/short manager, activist shareholders need to be experts in merger and acquisitions, turnaround, bankruptcies and corporate governance. That's Breeden.