Sahm Adrangi’s Kerrisdale Capital Management shocked the world with the move to raise about $100 million from investors only to bet on a single stock. Kerrisdale co-investment fund is a sort of a pioneer in the business. The managers ate the firm sometimes raise money to focus on an unusual investment thesis, for instance, the distressed companies or residential mortgage-backed securities. No one else in the hedge fund management is trying such moves. The relatively small firm plans to short the stock of a soon to announce public company with the funds raised.
According to an email written by Reuters, Adrangi acknowledged that they raise a significant amount of money with a small time frame. He claimed that they were aiming for a company worth over $10 billion and is challenging people who understand how their model works. Adrabgi and Shane Wilson have embarked on a journey to win over minds to their thesis. They are preparing a report, video website and other material for their upcoming campaign.
The company Kerrisdale targets are set to be unveiled in mid-May. This is according to a source whose identity remains anonymous because of the nature of the information. According to the source, the New York firm has already started establishing its position in the target company. They have gradually started acquiring stocks in the undisclosed business.
This strategy is not is not being tested for the first time. Kerrisdale is currently managing approximately $500 million which includes the new money raised. The money is mostly made as profit from shorting other companies publically. The companies include drug makers Sage Therapeutics and Zafgen, and Satellite Company Globalstar.
Adrangi’s Kerrisdale Capital Management principal hedge fund averages approximately 28% in annual returns for the last five years. The fund is used to bet for and against company stocks. In 2016, however, their fund was down by about 7% in March. As per July 2017, the company is worth $150 million. This is in contrast with the less than $1 million used by Sahm Adrangi t start the business. The success enjoyed by the form so far can be directly linked to the Chief Investment Officers ability to navigate the financial industry.
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