Hedge Fund Update
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A U.S. hedge fund that made $700 million by betting on game console retailer GameStop continues to maintain a strong momentum in the timely position of soaring energy and technology stocks.
New York-based Senvest Management has $3.3 billion in assets, run by co-chief investment officers and former college roommates Richard Mashaal and Brian Gonick, and has risen 76% this year through the end of July. number.
This makes it one of the best performing hedge funds in the world and brings this year’s income to approximately $1.6 billion.
According to a letter to investors seen by the Financial Times, Senvest’s strong performance is benefited from positions in Canadian energy companies Paramount Resources and Arc Resources, which have profited this year when oil prices soared. . The fund declined to comment.
Senvest made headlines when it was revealed earlier this year Established a share At the end of last year, the share price of US retailer GameStop exceeded 5%, betting that the negative bets of other hedge funds may be washed away.
In January, retail investors often coordinated their actions on Reddit, pushing the price of GameStop by 2400% during the frenzied market volatility. This has brought huge gains to Senves, which became one of the biggest winners in the turbulent Reddit trading saga, rising 38% in January and 67% in the first quarter.Others are not so lucky. Funding includes Melvin Capital Betting on falling prices suffers huge losses.
Senvest’s best-performing investments in the second quarter included Paramount Resources, whose stock price rose 69% in the second quarter, while Arc Resources rose 37%, thanks to the increase in oil prices from less than US$50 to more than US$70 this year. . It also profited from price increases at Internet retailer eBay.
Even after gaining such huge gains, Mashaal and Gonick believe that “support [for] The bull market is still intact,” they wrote in the investor letter. They pointed to the Fed’s unprecedented monetary support, huge fiscal stimulus, and the launch of the coronavirus vaccine.
More than half of the fund’s bets on price increases are in what they call “going out” stocks-as the economy recovers from the lockdown, stocks may perform well-such as clothing and accessories designers Capri Holdings, Versace and Jimmy Choo brands The owner.
In the second quarter, Senvest opened new short positions in a solar equipment supplier and a Canadian cannabis company—betting on falling prices.
As of the first half of this year, the fund has risen by more than 80%, but due to concerns about the spread of the coronavirus Delta variant, some low-priced small and medium-sized companies have suffered a loss of about 4% last month. Limit the “value” stocks it holds.
The company also remains relaxed on concerns about rising inflation, which has already shaken the market this year. The company wrote: “We believe that inflation concerns seem to be more media material than financial markets imply.”
It added: “Whether it is the Delta variant that may put pressure on reopening in the near term, or the supply chain restrictions that have led to recent price spikes, we believe these issues will be resolved over time.”