Maverick Capital Case Write Up

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Maverick Capital Case Write-up Maverick Capital’s Strategy Maverick Capital, led by Lee Ainslie III, deploys a hedged equity strategy, that seeks to “preserve and grow investor capital and to do it in a sustainable and highly ethical way.” Maverick Capital’s long-term success relies on their awareness of the five forces that help them understand the structure of their industry and lay out a position that is ultimately more profitable and less vulnerable to attack. The five forces are 1) customers 2) suppliers 3) substitutes 4) competition and 5) new entrants. The Bargaining Power of Customers Maverick Capitals investors (customers) include pension funds, endowments, and wealthy individuals. These investors have a lot of bargaining power…show more content…
If Maverick Capital does not distance itself from these substitutes, they will suffer in terms of profitability and growth potential. However, Maverick Capitals unique hedging strategy, impressive performance, and reputable name enables them to fend off the threat of substitutes in the market. The Intensity of Competitive Rivalry Maverick Capital faces other successful hedge funds employing different combinations of strategy and resources. These funds achieve returns similar to Maverick. However, Mavericks outstanding historical performance can be tied to the correct use of their resources. This ability provides Maverick Capital with a competitive advantage over their competition. The Threat of New Entrants Maverick Capital faces the threat of new entrants into the market place. Potential entrants may try to adopt Mavericks investment strategy, however, the potential and risk for imitation of their strategy is quite low. Even though there is an ample amount of available information and data for analysis, actual imitation of Mavericks approach would be difficult due to the limited people resources and the required alignment and fine-tuning of strategy and resources. Why a Hedge Fund and against what is it hedged Maverick Capital is a traditional hedge fund and seeks to reduce exposure to the market by offsetting long equity positions with short equity positions. In contrast, many hedge funds do

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