Ordinarily, it is not unusual for hedge fund managers to source for funds aimed at financing a particular investment theory. They sometimes focus on buying distressed stocks of energy firms or those secured by residential mortgages. Kerrisdale Capital Management, a New York-based firm, recently decided to do the unusual by raising money to finance a short sell of stocks for an unnamed public company. According to Reuters, the firm collected about 100 million dollars from its investors with the aim of rallying the money to the said investment idea. According to a reliable source, the target company was launched in May this year. Kerrisdale Capital management had, however, started buying the stocks earlier with the intention of cementing its standing with the unnamed company. The intention was to keep this information within the company.
The Company had the Knowledge
Reuters got to know of the news from an email sent to investors by SahmAdrangi, the CIO at Kerrisdale Capital Management. According to the email, the firm managed to raise the money in a very short time, which evidences that the investors had trust in the investment strategy. The company had been committed to ensuring that all big investors understood the knowledge behind the investment. It is in this breath that Adrangi teamed up with an analyst from the firm, Shane Wilson, to design a website, video, and a report that was aimed at driving the point home.It was not the first time that Kerrisdale Capital Management was betting against a company though it had gone public with the earlier investments. The company has bet against companies such as Zafgen, Globalstar and Sage Therapeutics. Currently, the company has about half a million dollars under its management. The amount includes the 100 million dollars raised. The company’s hedge fund averages at about 28 percent in annual returns, a trend that has been retained in the past five years. It, however, recorded a 7 percent fall last year.
SahmAdrangi is a highly knowledgeable individual in investments and hedge funds. He is a former student at the prestigious Yale University where he attained a Bachelor of Arts degree in economics.Before joining Kerrisdale Capital Management, Sahm worked for top investment companies, such as Deutsche Bank, Chanin Capital Partners, and Longacre Fund Management LLC.