Eric Reiter, a former equity analyst for long/short value shop Springhouse Capital, has launched Lilburn Capital, an equity value long/short offering.
Lilburn focuses on securities trading at a large discount to intrinsic value. “Right now, I’m managing a small pool of capital, so I have the luxury of investing in smaller, under-followed names that larger funds can’t possibly look at,” Reiter says. “These names tend to lack institutional coverage and, as a result, often present huge valuation inefficiencies that I can exploit.” Reiter believes that he can manage up to $250 million without having to adjust the strategy.
The fund maintains a concentrated portfolio focusing on “fewer but better ideas,” Reiter says. Currently, it has six positions, one a short. Reiter intends to maintain a long-bias and will invest in a maximum of 10 to 15 positions. The fund's largest holding will likely not exceed 20% of the portfolio.
Lilburn Capital charges 1% for management and 20% for performance, with a $100,000 minimum investment requirement.
Reiter has also worked as an investment banker at Donaldson Lufkin & Jenrette and as an associate for small-cap buyout shop, Generation Partners, as well as an associate in Capital Z's fund of funds group.