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King Street Capital Management LP

Last Updated: 12/3/2020

King Street Capital Management LP is a Limited Partnership that started in 1995 and is primarily owned and controlled by Brian J. Higgins and O. Francis Biondi, Jr. (retired).

Per its ADV, the investment strategy of the Flagship Funds is broadly defined as global long/short credit and event-driven. The European Funds apply the same strategy as the Flagship Funds to investments primarily in European companies, assets or situations, companies with significant European operations or securities and other financial instruments issued or traded in European markets. The principal investment objective of the Real Estate Funds is to produce attractive, risk-adjusted returns throughout diverse market environments by capitalizing on mispriced real estate investment opportunities. The ICC Fund’s investment objective is to invest in one or more portfolios of construction claims with respect to cost overruns not otherwise reimbursed during the construction of various projects.

King Street Capital Management LP operates out of an office in New York, NY. Based on the Form ADV filed on 2020-07-07 00:00:00, the investment firm is comprised of 200 employees, only 84 of whom performs investment advisory functions.

Fact Sheet

      Name: King Street Capital Management LP
      CRD No: 156785
      Filing Recorded: 2020-07-07 00:00:00
      Year of Origin: 1995
      Employees: 200
      Clients: 21
      AUM: 24,504,600,000
      Management Fee: 1 to 1.5 Percent
      Performance Fee: 10 to 20 Percent
      Client Type: Pooled Investment Vehicles
      Assets Traded: Unspecified


Investment Strategy

According to the brochure submitted to IAPD, King Streets investment strategy is as follows:

Each Fund seeks to achieve its objective by investing in instruments related to any level of an issuer’s capital structure (including, without limitation, bank debt, corporate bonds, trade claims, convertible securities, equities, credit default swaps, options and other derivatives, as well as the debt or equity of structured credit products) and across a broad spectrum of companies, industries and asset classes. Most of the Funds’ long and short investments are primarily directional in nature (as opposed to relative value opportunities), but the Funds also opportunistically implement intercapital trades. The Flagship Funds pursue investment opportunities in the U.S., as well as other markets, including, without limitation, Canada, the United Kingdom, continental Europe, South America, Asia and Australia. The European Funds focus primarily on investments in European issuers or situations, but also pursue investment opportunities involving other markets, including, without limitation, the U.S., Canada, Asia and Australia.

Methods of Analysis

In addition, King Streets methods of analysis include:

On the long side, the Funds focus on companies, assets and instruments trading below their inherent value. These investments include companies with fundamentally sound businesses that are experiencing financial distress or difficulty due to a challenging operating environment and/or inappropriate capital structures, including companies that are reorganizing under applicable bankruptcy laws, restructuring debt obligations outside of court, liquidating assets to pay off creditors or emerging from a recent financial restructuring. It has been the experience of King Street that banks, mutual funds, insurance companies and other institutional investors often sell the securities of these companies without regard for their inherent value because they are not equipped to analyze defaulted or distressed securities and are frequently not permitted or are unwilling to hold them in their portfolios due to, for example, their investment guidelines. Consequently, there are opportunities to purchase these securities at significant discounts to their recovery values. The Funds tend to invest in out-of-favor industries and issuers, including those experiencing business cycle weakness or a litigation or legislative-related overhang. Certain corporate actions such as spin-offs, M&A, operational reorganizations and management changes can lead to dislocations. These out-of-favor investments are typically made in the fulcrum security, whether debt or equity. In some instances, existing holders of securities may be under pressure to sell due to, for example, regulatory or risk management considerations. The Funds also invest in structured credit products, such as collateralized debt obligations, collateralized loan obligations and other asset-backed securities, when King Street believes they can be purchased at a discount to expected realizable cash flows.

In addition to long investments, an important aspect of each Fund’s strategy involves implementing short positions in the securities of companies that King Street believes may deteriorate in credit quality due to operating or financial challenges, become subject to a leveraging event (such as a leveraged buyout or recapitalization) or have a negative catalyst in the future.

In addition to directional long or short investments, the Funds opportunistically implement intercapital trades comprised of both a long and short component. Examples of such trades include basis trades between bonds and credit default swaps, trades that take a view on the steepness of an issuer’s credit curve, intercapital trades that are long a senior security and short a more junior security and pair trades between different issuers in related businesses.

Finally, certain Funds will have exposure to the Rockford Tower CLOs by virtue of direct investments and, indirectly, through their investment in RTCM, which retains Risk Retention Interests in the Rockford Tower CLOs. See “LSTA Decision Regarding CLO Risk Retention” below for information regarding potential changes to Risk Retention Interests.

Real Estate Funds. Also as noted in Item 4 (Advisory Business), the principal investment objective of the Real Estate Funds is to produce attractive, risk-adjusted returns throughout diverse market environments by capitalizing on mispriced real estate investment opportunities. The Real Estate Funds seek to invest in equity and debt interests in real estate and real estate-related assets through a global investment strategy across all major property types, focusing on situations that are out-offavor, complex, misunderstood or in markets undergoing a transition. Investments are generally expected to exhibit one or more of the following characteristics: (i) located in a market with a supply/demand imbalance; (ii) owned by a motivated seller; (iii) situated in a dislocated market; and/or (iv) under-managed or under-invested.

Rockford Tower CLOs. The Rockford Tower CLOs managed by RTCM will invest primarily in broadly syndicated loans and other similar obligations.

Top 10 Holdings from Form 13F

Reporting Period: 09/30/2020

Issuer Share Value(1000s) Put/Call
ARAMARK 4,905,000 129,737
SABRE CORP 15,000,000 97,650
GORES HLDGS IV INC 7,500,000 77,325
VICI PPTYS INC 2,990,000 69,876
CHENIERE ENERGY INC 1,500,000 69,405
LAS VEGAS SANDS CORP 1,260,000 58,792
MOSAIC CO NEW 2,815,000 51,430
RADIAN GROUP INC 3,074,000 44,911
SURGERY PARTNERS INC 1,878,733 41,144

Historical 13F Filings

EdgeGiant has compiled all 13F filings since Q2 2013 for your convenience. You can view historical portfolio position forKing Street Capital Management LPin our 13F section HERE.

To get the comprehensive list of holdings that fall under 13F regulatory guidelines, check out our write up on how to access and use 13Fs in your personal investment decisions.

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Historical Portfolio Holdings for King Street Capital Management LP