Carlson Capital Management Partners LP. is the brainchild of Mr. Clint Carlson who founded the firm in 1993. It is based out of Dallas, Texas. It has an additional branch office in Houston, Texas. It has recently established offices in London and New York as well to cater to its expansion. It primarily deals in private equity and hedge funds. Currently it boasts a total of $6.4 billion of assets under management.

Carlson Capital also manages the Black Diamond hedge fund. Black Diamond was founded in 1997, and has a total value of $3.86 billion. It maintained an annual growth rate of 11% till the year 2009 when market conditions began impacting the fund. It focuses on a non-directional, multi-strategy investment approach to the global markets

Carlson’s top ten equity holdings are Citigroup, Genzyme Corporation, Marshall and Lisley Corporation, Pride International Inc, Bucyrus International Inc, Bank of America Corp, Pepsi Co Inc, JP Morgan Chase, Starwood Hotels and Resorts Worldwide Inc and Oracle Corporation.

The five largest stocks that Carlson sold in the first quarter of 2011 are Alcon Inc (ACL), Dover Corp (DOV), Exxon Mobil Corp (XOM), Mcafee Inc and Potash Corp Sask Inc (POT). It currently holds 506 securities as a part of its portfolio.

Post 2009, it has generally been observed to be a rough going for Carlson. In first quarter of 2011, it was observed that the firm was dealt by a blow from its Massey Energy Corporation securities. These stocks recorded a decline in value by 13.5 % and hence underperforming SPY’s 1.1% return bench mark.

Citigroup Inc was Carlson’s biggest investment at the end of first quarter of 2011. However, it has lost out by 6% since the end of March and hence underperformed SPY’s 1.1% return. Carlson has increased his stocks by 204.3%.

Genzyme Corp has recently been overtaken by Sanofi Eventis. It currently holds $120.8 million worth of Genzyme stocks.

Carlson bought $54 million of RDS shares during the last quarter of 2010. RDS has lost 3.3% since the end of March.

Investment Philosophy:

Carlson Capital Management describes itself as an alternative asset management company. It has associated with it- Black Diamond Hedge Funds; Carlson Alternative Advisors; Carlson Capital LP; Double Black Diamond LP; Carlson Capital GP; Asgard Investment Corp; Carlson Offshore Advisors. The composition of Carlson’s assets is such that the majority of it is invested in financial sector, followed by the services and technology sector. Energy sector has taken a huge part in Carlson’s composition in recent time so much so that Mr. Ronald Hulme is now observed to be more consumed on that particular front.

Currently Carlson primarily deals in private equity and hedge funds. It boasts a total of $6.4 billion of assets under management. It focuses on a non-directional, multi-strategy investment approach to the global markets. Globally it covers North America and Europe in particular. “The firm provides its services to pooled investment vehicles and corporations. It manages private equity and hedge funds. The firm invests in the public equity, fixed income, and hedging markets of the United States. It employs multi-strategy approach including risk arbitrage, convertible arbitrage, relative value arbitrage, distressed /credit arbitrage, and long/short strategies to make its investments.” (Bloomberg Businessweek)

Manager’s Bio:

Recently Carlson Management hired Mr. Ronald Hulme as Chief Executive Officer. He was previously associated with McKinsey & Co where he discharged his duties as the Managing Director. Mr. Hulme had been appointed for the post in lieu of his impressive credentials and the expansive nature of the company. Exuberant running meant that the company needed to be managed more as per the vision shared by its founders.

Mr. Ronald Hulme did his BBA from University of Texas at Austin. He finished first in his class. He later went on to pursue his MBA at the prestigious Stanford University. He was the Arjay Miller Scholar there. Prior to Carlson, Mr. Hulme held the post of Director and Senior Partner at McKinsey & Co. he has an experience of 26 years to back up his repute as a market veteran. At McKinsey he played an active and pivotal role in the firm’s management and governance. He led and Co led McKinsey’s Practice Groups which included the Global Strategy Practice, the Global Finance Practice, the Global Risk Practice, the American Oil and Gas Practice and the American Chemical Practice. In addition to this impressive list of credentials, he was also a member of McKinsey’s Board of Directors and headed one of their policy committees as Chairman. He was also member of shareholder’s council. As a Managing Direction he had to supervise the overall performance of the company, had responsibility for the firm’s global knowledge efforts and six functional practices namely, strategy, organization, operations, marketing, corporate finance and information technology. He is an active board member of several non-profit organizations including Texas Children’s Hospital, University of Texas McCombs School of Business, Alley Theatre and the Institute for Sustainable Peace.

Alongside Mr. Ronald Hulme, is the founder and the main man behind the success of Carlson over the years, Mr. Clint Carlson. He currently holds the position of Chief Investment Officer. It is under his supervision and tenure that the company was able to make a mark for itself and reach assets amounting to $6.4 billion in May 2011.

Mr. Carlson holds a BA degree from the University of Rice in the discipline of Economics. He later pursued his MBA at Rice too before officially setting his foot in to the industry. Interestingly enough, Mr. Carlson’s qualification are not just confined to Finance. He in fact also holds a Doctorate in Law, from University of Houston. Mr. Carlson is a board member of the University of Texas Investment Management Company (UTIMCO) and a Trustee of the Dallas Museum of Art.

Clint D. Carlson is a member of the Investment Committee and will play a key role in shaping the Fund’s investment strategy at Parallel Resource Partners.

Under the leadership of Mr. Carlson’s and his active involvement in the firm’s investment activities, Carlson Capital has grown from a one‑office firm managing approximately $17 million of assets to a five‑office firm managing approximately $6.6 billion of assets as of March 1, 2011. Mr. Carlson has over 25 years of experience as an active energy investor in public equity, private equity and credit markets with a distinctive long-term track record and was featured by Absolute Return magazine in 2008 for his investment performance.

Previously from 1988 to 1993, Mr. Carlson successfully executed hedged and event-oriented investment strategies for the investment arm of the Bass Brothers organization where he was head of risk arbitrage. From 1985 to 1988, Mr. Carlson co-managed a risk arbitrage fund for Maxxam Group and affiliated companies that included a significant number of non-arbitrage equity and high-yield investments which were the focus of a value-oriented investment strategy. For two years prior to that, Mr. Carlson managed growth stock accounts at American Capital Asset Management, where he was instrumental in developing the quantitative equity valuation model that was used in managing institutional growth stock portfolios, and at Texas Commerce Bank.

His area of expertise and concentration encompass risk arbitrage. Value arbitrage and distressed/credit arbitrage.

His biggest fund to date has been Double Black Diamond. It was founded in 1997 and currently holds the value of $3.86 billion. It had an annual growth rate of a whopping 11 per cent till the year 2009 when the market took a downturn.

Carlson under performed in the first quarter of 2011 and currently has 506 securities as a part of his portfolio. The five largest stocks that Carlson sold in the first quarter of 2011 are Alcon Inc (ACL), Dover Corp (DOV), Exxon Mobil Corp (XOM), Mcafee Inc and Potash Corp Sask Inc (POT). This under performance has been attributed by stock analysts to the decline in Massey Energy Company Stocks. It has lost out on 13.5% by the end of March dealing the biggest blow in the first quarter. It under performed SPY’s 1.1% return. However, this is a temporary blow and Citigroup’s stocks are expected to rise. Citigroup is a favorite amongst all hedge fund managers including Mr. Clint Marshall himself.

Recently in February 2011, Mr. Ronald Hulme in lieu of his additional charge of Energy Group at Carlson Group, stepped down from his official charge as Chief Executive Officer. He currently holds the position as the vice chairman. However, his job description and significance in the company’s running remains primarily the same but his involvement in terms of time has significantly decreased as per his new charge.

In 2008, Carlson Capital amidst its immense success suffered a controversy with Securities Exchange Commission on the charge of improper trading practices. As per technical Rule 105, the rule prohibits an investor from participating in a company’s stock offering if that investor has sold short the same stock within five days prior to the offering. The purpose of the rule is to prevent market manipulation through shorting, or betting that a company’s stock price will drop. A stock offering by a company typically depresses its share price.

The S.E.C. charged Carlson with improperly participating in four 2008 stock offerings — by Wells Fargo, the Equitable Corporation, Rockwood Holdings and Capital One — after selling short those same stocks. Carlson, which manages $5.5 billion in funds under the Black Diamond banner, is run by Clint Carlson, a former money manager for the billionaire Bass brothers. The firm settled with the S.E.C. without admitting or denying the charges.

Quotes:

“I have known and worked with Ron in different capacities over the years, and believe the Firm will benefit immensely from his strategic vision and leadership skills,” Clint Carlson commented. “As the hedge fund landscape continues to evolve, we view this as a strategically important time to seize new opportunities while enhancing investment and management processes. Ron will contribute to these efforts with integrity, skill, and sound judgment. In addition, his broad and deep experience in the global energy industry provides the ideal foundation for expanding our presence in the energy sector, where we see substantial opportunity in the coming years.” Clint Carlson (Hedge Fund Tracker)

“Carlson Capital is a focused and disciplined investment firm that always puts its investors first — characteristics I have admired over the years. There is a collective sense that unique opportunities lie ahead, which creates a need to expand and strengthen the Firm’s management team. I am thrilled to join Carlson, believe strongly in the future potential of the Firm proven by its prior record of success, and look forward to getting to work.” Ronald Hulme (Hedge Fund Tracker)

“We are pleased to resolve this matter and believe that this agreement is in the best interests of the firm and our investors,” a Carlson spokesman said. On the issue of charge against Carlson by SEC. (New York Times)