Gabe Plotkin founded Melvin Capital management firm in 2014, and he serves as the Chief Investment Officer. It is a registered investment advisor in New York City.They follow some strategies to deliver superior and risk-adjusted returns by employing a long-short equity strategy. Initially, the firm invests in common stocks and tech. The firm was started at $1billion, and now it is estimated to have $8billion in assets under management (AUM). Now, the company is facing losses because of various legal complaints.
Melvin Capital Company provides the services to the pooled investmentvehicles and other separately managed accounts. The clients of this management company include high net worth individuals, institutions, and other sophisticated investors. The requirement for taking their services initially is $1million and for managed accounts, it can be up to $50 million.
At the initial stage, Melvin capital has performed well and has positioned 2nd rank in the list of top-performing funds. The performance of the firm for the long-term has been strong and so it made the founder Gabe Plotkin a billionaire within few years.
In 2017, Plotkin is known to be the highest-paid hedge fund manager. In 2019,the firm has surged by more than 46 percent and 52 percent in 2020.
He was so successful until the collapse of funds in January 2021. You could see so much evidence of his losses this year. Still, the company refuses to say the actual loss, and they are not confessing the right amount of loss to the media.
Melvin Capital has believed the GameStop’s business model as many people are interested in playing games during pandemic times. But in turn, GameStop has some significant losses.
However, he got help from his previous boss Steve Cohen and Ken Griffin to manage the losses. They are ready to invest $2.75 billion into Melvin Capital management.