Pirate's Activist Funds Declined as Much as 19.2% Through July

Pirate Capital LLC, the hedge-fund firm run by Thomas Hudson, lost between 17.5 percent and 19.2 percent in its two activist portfolios this year through July, according to an investor letter, hurt by withdrawals and investment losses.

The two funds at the Norwalk, Connecticut-based firm, which are known for encouraging changes at companies they own, have $100 million in assets concentrated in four positions.

Pirate told investors at the end of August that it was barring withdrawals from the funds, which hold positions in armored carmaker Brink's Co.; auto-parts retailer Pep Boys-Manny, Moe & Jack; U.S. energy supplier Aquila Inc; and Angelica Corp., a laundry and textile-rental services company.

``Pirate Capital remains committed to its event-driven strategy to create value for its investors,'' the firm said today in a statement.

The event-driven strategy centers on its biggest fund, the Jolly Roger Offshore Fund, which lost 3.63 percent through July, according to the investor letter. The investment pool had assets of about $199 million as of Sept. 1. Event funds invest in companies going through transitions such as mergers, spinoffs or bankruptcies.

Brink's shares fell 4.3 percent through July, Angelica erased 15 percent and Aquila lost 20 percent. Pep Boys gained 14 percent in the first seven months of the year. The four stocks represented about 96 percent of the firm's stock holdings as of June 30, according to a U.S. regulatory filing.

Brink's lost another 11 percent since then, Pep Boys declined 11 percent and Angelica dropped 18 percent. Aquila added 3.7 percent.

Hudson, 41, who founded Pirate in 2002, is known for acquiring stakes in companies and pushing management to make changes to boost their stock prices.

The firm's assets fell to $375 million as of Sept. 1 from $1.8 billion a year earlier, an 80 percent drop, as investors pulled their money from the funds.

Pirate said today its four funds have gained more than 4 percent in the past 12 months. Sept. 13 (Bloomberg) --