Soroban Capital Partners
How to make money in cyclicals while navigating geopolitics and secular trends
In this article, we will learn about Soroban Capital, a $11 billion AUM hedge fund with roots in cyclicals and commodities. In the hedge fund land flooded by firms chasing high-growth stocks at any price, some argue that Soroban’s investment style is a dying breed, but Eric Mandelblatt, Soroban’s founder, believes the future is unlike the past.
You will learn how to make money in cyclical stocks and understand the future supply and demand dynamics for energy and basic materials companies amid two major global conflicts and secular trends.
Let's dive in.
Eric Mandelblatt
Soroban is part of the lineage of "Robert Rubin cubs.” To be precise, a Rubin grand cub (I coined the terms without trademarking, just to be clear, but anyone knows who came up with the term “Tiger Cub?”)
"Soroban (算盤/そろばん)" is the Japanese word for abacus. I don’t know the reasoning behind the name, but I am glad at least it’s not another fund with the name of a Roman or Greek god.
Before serving as the 70th U.S. Secretary of the Treasury, Robert Rubin ran the risk arbitrage department at Goldman Sachs, and some of his lieutenants became successful hedge fund founders, one of whom is Dinakar Singh, who co-founded TPG-Axon with Eric Mandelblatt, the main character of our story today.
Mandelblatt graduated from the University of Florida in 1998 with an accounting degree. During recruiting, he sent out 400 applications and received only two callbacks, both from Goldman Sachs: one in IB, the other in equity research. He interviewed with lead natural gas analyst David Fleischer and was given a seat.
After four years in sell-side equity research, Mandelblatt moved internally to Goldman Sachs Principal Strategies Group (formerly known as the risk arbitrage group run by Robert Rubin) as a buy-side analyst. Two years later, he was promoted to Chief Operating Officer of the US Principal Strategies business.
In 2005, Mandelblatt left Goldman Sachs to co-found the hedge fund TPG-Axon Capital.
In 2010, he co-founded Soroban with TPG-Axon partner Gaurav Kapadia and TPG-Axon head trader Scott Friedman.
More to come:
Soroban Capital
Investment Framework on Cyclicals
Thesis on railroad operators
Team profile and getting a job at Soroban