Forbes

The Oil Man and the Sea

Kjell Inge Rokke amassed a $1.7 billion fortune by stripping the oceans. Now he says he wants to clean up the mess.

- By Noah Kirsch

Merrill, and Maitland became a top producer, selling them to major clients like billionair­e investor Howard Marks, then at Trust Company of the West. “You could make money and you couldn’t lose, as far as I could tell,” says Marks of LYONs.

Eventually, Maitland returned to Merrill’s New York offices in 1987 and became head of convertibl­e sales, a backwater at the firm. “Even though we were the most profitable unit in the firm for many years, we were still a sideshow,” he says.

In 1995, he spun out his operation, dubbed it Advent, and began to forge a reputation for weathering turbulent markets. His strategies range from defensive convertibl­es to riskier highyield bonds and hedge funds. Each has returned between 7% and 8% annually since inception. His small publicly traded closedend fund, Advent Convertibl­e and Income, has underperfo­rmed, in part because of leverage—it’s down 27% year to date, erasing its 2019 gains, and sells at a 10% discount to its net asset value.

Maitland, now worth an estimated $250 million, has made gossip pages as a Wall Street booster for former President Obama, though he’s no bleeding heart. He calls Queens Congresswo­man Alexandria OcasioCort­ez “financiall­y illiterate” for her attacks on Amazon. “Demonizing people who are successful is not in the nation’s best interest,” he sniffs.

Currently Maitland is loading up on the convertibl­es of unleverage­d technology and healthcare companies. Advent’s conviction buys include Massachuse­ttsbased Akamai Technologi­es, which sells cloud infrastruc­ture to web and streaming businesses; Workday, a Pleasanton, California–based payroll provider; and Twitter.

Akamai’s cloudnetwo­rking infrastruc­ture will benefit from rising web traffic by stayathome workers, and it carries minimal debt. “For many tech companies, the convert is only debt on the balance sheet,” Maitland points out. Workday might be an even safer bet. The software firm has $1 billion in net cash and reported 30% revenue growth last year, a good cushion for potential financial problems among its smallbusin­ess users. Given the recent market slide, all of Maitland’s holdings have significan­t conversion premiums—meaning their underlying equity sells for a price well below the notes’ designated conversion price.

Twitter’s convertibl­e, issued in June 2018, trades at just 87 cents on the dollar, but Maitland sees little risk. “Twitter has a fortress balance,” he says, citing its $3.8 billion in net cash. Twitter’s stock needs to rise above $57 from its current $25 for its convertibl­e to be worth exercising.

Says Maitland, “If you’re discipline­d and you’re able to evaluate credit, this is creating real opportunit­y.”

FINAL THOUGHT “IF YOU CAN GET THROUGH THE TWILIGHT, YOU’LL LIVE THROUGH THE NIGHT.” —Dorothy Parker

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A Bronx native, Maitland prefers hiring from New York City public colleges to fill his analyst ranks.
Empire Statesman A Bronx native, Maitland prefers hiring from New York City public colleges to fill his analyst ranks.

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