In a new and virtually unprecedented move, founder and Chief Investment Officer of Kerrisdale Capital Management, SahmAdrangi, has raised an astounding $100 million from investors in order to bet against a single stock. This new Kerrisdale fund has been dubbed a co-investment and appears to be the very first of its kind. Although it is common for hedge-fund managers to secure funding in order to recover distressed corporations, such as energy companies, or residential mortgage-backed securities, this move, by the small New York-based fund, is quite unique.
In a recent email delivered to investors, Mr. SahmAdrangi detailed the fact that he and his company have garnered a significant amount of capital in a relatively short amount of time, as well as the fact that the target company has a substantial net worth, totaling over $10 billion. Mr. Adrangi believes that his initial success in garnering backing is proof that his thesis has begun to make waves within the investment community. In an effort to garner increased backing, Mr. Adrangi, along with an analyst from Kerrisdale Capital Management, Shane Wilson, he intends to create a report, a website, and new video that will further detail his thesis.
According to an unnamed source, the company that Kerrisdale Capital Mangement is targeting will be revealed as early as May of this year, and the company has already begun buy stock in the company in order to steady its position.
Mr. Adrangi is currently the Chief Investment Officer of Kerrisdale Capital Management, having held the position since its inception in 2009. While the company today manages about $500 million, including the funding that has been secured since the announcement of the impending short sale, it was created by Mr. Adrangi on a budget of less than $1 million. He initially garnered his reputation through short selling and the publishing of research, helping to correct commonly held misconceptions about shorts and the market as a whole. In 2010 and 2011, Mr. Adrangi was lauded for his work in exposing the fraudulent Chinese companies, China Marine Food Group, Lihua International, and China-Biotics.