Owl Spring Targets Activism with a Hedge

Corrected from 2:54 p.m. to reference investment in International Game Technology (IGT) and not International Technology Group (ITG)

 (TheStreet) -- Activist investors such as Carl Icahn, Jeffrey Ubben of ValueAct Capital, Nelson Peltz of Trian Management and Bill Ackman of Pershing Square have spent 2013 engaging companies as big as Apple (AAPL), Microsoft (MSFT), Pepsico (PEP) and Procter & Gamble (PG), however, some funds entering the business are content to take on smaller parts of the stock market.

Owl Spring Asset Management, a combination of Ader Investment Management and Cumberland Associates, is poised to launch with $225 million in assets under management and a strategy of imparting change at under-performing or mismanaged companies between $200 million and $2 billion in size. The firm will also look to hedge its investments with a portfolio of short positions that may be unique among so-called activist funds.

The fund's creation, which was announced on Wednesday, also comes at a time when small and mid-sized firms are generally overlooked by the business press and retail investors. Meanwhile, a rising number of initial public offerings in 2013 and the poor performance of some once high-profile firms is creating a new crop of companies for activists and value investors to target.

Owl Spring will be run by Jason Ader, a prominent gaming analyst who successfully advocated board changes at International Game Technology  (ITG) this year with his firm Ader Investment Management. Ader will be joined by Andrew Wallach, the CEO of Cumberland Associates, the predecessor of Owl Spring Asset Management.

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