Lone Hedge-Fund Bear at 2018 Sohn London Comes Out on Top
Lone Hedge-Fund Bear at 2018 Sohn London Comes Out on Top
(Bloomberg) --
When Vikram Kumar took the stage to talk about his investment tips at the Sohn London conference last year, he was alone in recommending a bearish bet. A year later, his call has proved prescient.
The founder of Kuvari Partners suggested shorting Kier Group Plc on concerns the construction firm might have to raise equity, predicting the stock could lose half of its value. The following day, the firm announced a 264 million pound ($339 million) rights issue and its shares fell by a third.
Kier Group has crashed almost 90% since Kumar’s Nov. 29 prediction, easily topping the 10 stock tips shared at last year’s conference. It’s the second year in a row that bearish calls have produced the best results at Sohn London.
“Shorting is part of the DNA here at Kuvari,” Kumar said in an email. “Kier fitted within the accounting and balance sheet framework.”
Kumar’s fund was up 11% this year through October and 10.5% in 2018, thanks partly to wagers against Kier. Kuvari is still the biggest short seller of the shares, according to data compiled by Bloomberg.
Eight of the 10 stock tips disclosed during last year’s conference are now profitable:
| Fund Manager | Firm | Investment | Change |
|---|---|---|---|
Short Call | |||
| Vikram Kumar | Kuvari Partners | Kier Group | -88% |
Long Call | |||
| Drew Dickson | Albert Bridge | Micro Focus International | -27% |
| Luke Newman | Janus Henderson | Rolls-Royce Holdings | -10% |
| Andy Brough | Schroders | Restaurant Group | 1% |
| Andy Brough | Schroders | Sports Direct International | 7% |
| Maxime Franzetti | Mubadala | Korian | 19% |
| Bernie Ahkong | UBS O’Connor | Flutter Entertainment (Paddy Power) | 20% |
| Rachel Reutter | J O Hambro | Smiths Group | 23% |
| Dureka Carrasquillo | CPPIB | Ferrari | 61% |
| Benoît Colas | PrimeStone | Spirent Communications | 66% |
| NOTE: Returns include dividends reinvested in shares | |||
Benoit Colas, the managing partner of activist hedge fund PrimeStone Capital, tipped buying Spirent Communications Plc, a London-based technology company focused on telecommunications and medical sectors. He described the company as solid, with significant upside potential. The stock has surged 66% since then, making Colas’s idea the second best from last year.
Dureka Carrasquillo of Canada Pension Plan Investment Board predicted a 60% surge in Ferrari NV shares because the car maker’s development pipeline was more aggressive than in the past. The shares have risen 61% since her call.
Drew Dickson, founder of Albert Bridge Capital, said the shares of software firm Micro Focus International Plc might double in value. The stock proceeded to rise more than a third by March this year, but has since slumped. Albert Bridge exited the bet at over 2,000 pence per share, and is now reconsidering re-entry after recent stumbles, Dickson said.
Per Lekander, who manages an energy fund for Lansdowne Partners, was the only speaker last year not to recommend a stock. He tipped betting on the carbon-credit market, saying that regulatory change could potentially lead to five-fold growth. It’s gained almost 27% since, according to an index.
Speakers disclosing their investment ideas at this year’s conference on Thursday are: Jason Ader, Fadi Arbid, Brian Baldwin, Catherine Berjal, Tamas Eisenberger, James Hanbury, Per Johansson, Arnaud Langlois, Mans Larsson, Lucy MacDonald, and Pieter Taselaar.
To contact the reporters on this story: Nishant Kumar in London at nkumar173@bloomberg.net;Suzy Waite in London at swaite8@bloomberg.net
To contact the editors responsible for this story: Shelley Robinson at ssmith118@bloomberg.net, Chris Bourke, Marion Dakers
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