SILVERLEAF STAKE OF 5.2% TAKEN BY MANAGER NIXON

Bloomberg News

July 23, 1999
WASHINGTON (Bloomberg) -- Hedge funds managed by Geoffrey Nixon acquired a 5.2 percent stake in Silverleaf Resorts Inc., a timeshare company whose stock has been beaten down by investors.

Nixon's New York based hedge fund group, which operates under the name MCM Associates Ltd., holds 666,200 common shares, according to a Schedule 13G filed with the Securities and Exchange Commission.

Shares of Dallas-based Silverleaf traded as high as 29 1/8 in February, 1998. The shares now trade at about 8, providing a buying opportunity for those who like the prospects of the timeshare resort business. "You speak to anyone who buys a timeshare and the satisfaction is incredible,'' Nixon said in an interview. "Silverleaf is perceived as a real high-energy, high-quality company,'' by people who stay at its resorts, he said.

Nixon, a native New Zealander who started up his hedge fund company in 1991, said he bought most of his Silverleaf shares during the past three or four months. The hedge fund group crossed the 5 percent threshold that requires public disclosure on July 15, according to the SEC filing.

As a member of the timeshare industry, Silverleaf acquires resorts and then sells vacationers the right to stay at these properties, typically for one week annually, over a multi-year period.

Silverleaf owns drive-to resorts -- located in rustic settings that are close to major metropolitan areas -- that offer activities such as golf, fishing, boating, swimming, horseback riding, tennis, and archery. Its destination resorts are located in or near areas with national tourist appeal.

Timeshare companies have developed a bad reputation for failing to maintain their properties after selling vacations, Nixon said. However, the industry is improving as companies such as Walt Disney Co. enter the business, he added.

Nixon invests primarily in small-cap growth companies, and holds stakes in Universal Electronics Inc. and Styling Technology Corp. He said he has about $60 million in assets under management.