In a disclosure to the Securities & Exchange Commission, Cumberland Associates, a New York investment management firm, said it holds 5.3 percent of Hawaiian's stock, or just over 2 million shares.
Cumberland's shares were purchased Sept. 20 for $3.25 a share, or $6.6 million, on behalf of 10 investment accounts that Cumberland manages. (Hawaiian's stock closed today at $3.62-1/2, down 6 cents from yesterday, according to Bloomberg Business News.)
"We are generally passive investors," said Bruce G. Wilcox, one of the general partners of Cumberland Associates. "We're a pretty standard private investment partnership," he said.
Cumberland manages about $1 billion in investments, holding full discretion on where it moves its clients' money.
"We're value-oriented investors," Wilcox said. Cumberland looks for opportunities where it perceives value that hasn't been fully developed and where there is an opportunity for the business to improve, he said. Hawaiian fits that description, Wilcox added.
Cumberland tends to stay in for the long term and could be an investor in Hawaiian for seven or eight years and certainly will keep its position for at least 18 to 20 months, he said.
Cumberland's investment has no effect on the controlling position of Airline Investors Partnership. That group, also based in New York, invested $20 million in the airline in January in return for 18 million shares and six seats on Hawaiian's 11-member board of directors. Airline Investors' leader John Adams is now Hawaiian's board chairman.
The Cumberland investment was a private deal at the same time that Hawaiian offered about 10 million new shares to its existing shareholders and to employees.
The result of the new stock sales was an increase in the number shares outstanding to about 38 million, from about 26 million, and a dilution of some existing holdings, while Hawaiian raised some $39 million.
According to Hawaiian spokesman Keoni Wagner, the major owners of the airline now are:
Airline Investors Partnership, 47.3 percent, down significantly from a 67 percent holding. AIP was not included in last month's offering to existing shareholders.
Cumberland, 5.3 percent.
Employees through 401k plans and other group plans, 4.5 percent.
Wilcox, who was born in Honolulu in 1954 as the son of a career Marine and went to Kailua Intermediate and Kailua High, said he joined Cumberland Associates 10 years ago. He has been a general partner since late 1989.
Cumberland has had interests in Hawaii businesses from time to time, he said, including a small stake in Schuler Homes Inc.
Hawaiian Airlines was brought to Cumberland's attention by Hawaiian's investment bankers, Jeffries & Co., which often works with Cumberland, Wilcox said.