Sculptor Capital Management, Inc. (SCU) stock prices were up by 2.88% as of the market closing on May 14th, 2021, bringing the price per share up to USD$25.76 at the end of the trading day. Subsequent pre-market fluctuations saw the stock increase by 0.93%, bringing it up to USD$26.
End of the Drought
Earlier in May of 2020, SCU announced the end of several years of client withdrawals that added up to USD$30 billion, in the company’s first quarter of net inflows since 2014. Total assets came out to USD$10.9 billion as of March 31st, 2021, having attracted a net total of USD$78 million of fresh cash with its flagship fund and associated portfolios.
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Healthy Spread of Inflows
The hedge fund inflows came from a myriad of sources that represented a broad range of investors from all over the world. With allocators ranging from consultant advised to not, institutional and retail, the mix has been described as healthy and balanced.
2014 Bribery Probe
The devastating withdrawals commenced in 2014 after the company became the target of a bribery probe into its business based in Africa. In an effort to distance itself from the crisis, SCU made sweeping changes to its management ranks and took on a new name in 2019. After the giant client exodus and plummeting stock price, the company attempted to reverse the damage by reducing or shuttering its non-core business as it focused on the development of its flagship.
Settlement of Bribery Case
The company’s Africa unit closed the matter on the bribery issue late in 2020, having reached a USD$138 million settlement. The final payment was on top of the hundreds of millions of dollars that SCU had already paid in fines and penalties as part of a deferred prosecution agreement with the United States, and a guilty plea by the Africa unit. With the settlement payment, however, the company hopes to put all the legacy issues to rest.
Continuing to Grow
SCU reported having USD$26.8 billion worth of assets under its management as of May 1st, 2021, including collateralized loan obligations amounting to USD$15 billion, growing to becoming their largest business. Hedge fund assets made up more than 30% of the firm’s total assets as of May 1st, 2021, with USD$11.2 billion in multi-strategy funds, the company’s highest-fee product.
Future Outlook for SCU
After a long and arduous several years, SCU has managed to stay afloat and finally looks to be back on track to profitability. With such drastic changes over that time, current and potential investors look to the new management to leverage the resources at their disposal to usher in significant and sustained increases in shareholder value.
