Chief Investment Officer SahmAdrangi of Kerrisdale Capital Management has solicited nearly $100 million in an attempt to short a stock that was being made public in May of 2016. This effort is part of the company’s new co-investment fund, which is a the first time that a hedge fund of this type is being created.
Kerrisdale manages approximately a half a billion dollars, is known for gambling against companies and making that information public. In the recent past it has taken short positions against Sage Therapeutics, Zafgen, and Globalstar. Adrangi became known in the financial community for shorting fraudulent Chinese companies, many of which became subject to investigation and enforcement actions by the Securities and Exchange Commission.
In an email to investors security originally published by Reuters Adrangi stated “”We raised a meaningful amount of capital [in] a very short timeframe, so clearly we struck a chord within the alternatives community” and “We’ve taken a company that’s worth north of $10 [billion], and we’ve endeavored to get everyone to understand the insights we have about it,” .
Adrangi’s shorting stock methods have been successful in the recent past considering the fund has made approximately 28% in the last five years. Although, it was down 7% at the time of this venture.
Kerrisdale is based in New York and is a firm that focuses on long-term value investments and event-driven special situations. The firm is the lead in the soft activism investing approach, which attempts to create catalysts by sharing its ideas with the broader investment communities.
SahmAdrangi is the founder and Chief Investment Officer Kerrisdale Capital Management which was formed in 2009. After graduating from Yale with a Bachelor of Arts in Economics, he began his career with Deutsche Bank and then went on to become an analyst for Longacre Management Inc.
Citing the opioid addiction epidemic in the United States as a driving force, investment officers at Highland Capital Management of Dallas, Texas are finding growth opportunities in non-opioid pain reliever production. The company’s small-cap fund allocates a sector of approximately 25% for health care industry investments, close only to the 16% for energy concern investments as of December 2016.
In the February 2, 2017 Market Watch article, “Fund that almost tripled the S&P 500’s gain last year is now big on health-care stocks,” Michael Gregory details why his Highland Small Cap Equity Fund is investing in pharmaceutical companies developing non-opioid pain relievers. Gregory is the chief investment officer of Highland Alternative Investors, a division of Highland Capital Management, which runs the small-cap stock fund. Gregory noted that insurance providers are starting to “fast-track” pain relievers designed to be less addictive. One such company, Collegium Pharmaceutical Inc., is combining oxycodone with fatty acids and waxes to make it difficult to concentrate, therefore harder to abuse. Another company Gregory cited, Pacira Pharmaceuticals Inc., produces a non-opioid pain reliever specifically for use after soft-tissue surgeries. Gregory expects to see tremendous growth in these stocks as this safer generation of pain medication gains market share and approvals. The Market Watch article stated that it was Gregory’s and his co-manager, James Dondero’s, tactics that lead to the 31.6% returns in 2016, mostly through energy stock picks.
According to Nasdaq, not only does Highland Small Cap Equity hold stocks in Collegium and Pacira pharmaceutical companies, but also in businesses such as Minerva Neurosciences Inc. and Coherus BioSciences, Inc. Gregory is confident that allocating a large sector of investments in the health care industry will pay off as he expects the industry to rebound significantly in 2017.