What does Randall D. Smith know that other US investors don't? The New York Times reports that for the better part of a year, Smith has been quietly building a fledgling media empire by investing millions of dollars in ailing newspaper groups and radio broadcasters.
He is expected to be among the bidders for the Philadelphia Inquirer, the paper that will be sold by auction tomorrow. But he isn't saying because, even by the secrecy standards of the hedge fund business, Smith keeps an unusually low profile.
Smith is a "vulture investor", one who buys up the debt of weak companies for a song in the hope of turning a profit when the companies are restructured or pass through bankruptcy protection.
But can newspaper publishers ever be turned around? Industry analyst John Morton is doubtful: "It's unclear that this industry is going to get a whole lot better."
Smith is not the only vulture. A handful of hedge funds, as well as some big banks, are vying for ownership or have already gained controlling interests in newspapers across America, including the Los Angeles Times, the Minneapolis Star Tribune and the Chicago Tribune.
Hedge funds have even grabbed stakes in supermarket tabloids like the National Enquirer and Star Magazine since their owners carried out restructures.
But Randy Smith is regarded as one of savviest and stealthiest of investors, so all eyes are on him.
Source: New York Times
