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Dorsal Capital Launches New Hedge Fund

So far the firm, founded by an ex-SAC Capital portfolio manager, is not opening the fund to outside investors.

A hedge fund firm founded by a former SAC Capital portfolio manager has launched a new fund, according to regulatory filings.

Dorsal Capital Management trotted out the Dorsal Special Opportunities Fund and an offshore version, according to the filings. The funds began trading on November 1.

So far, however, the funds are not available to outside investors. No marketing materials are available, and no roadshow is planned at this point, according to a person with knowledge of the situation. No additional information or detail about the funds’ strategies is provided in the SEC documents, dated October 31. 

Dorsal specializes in technology, media, and consumer companies. The firm is also one of the largest among the so-called SAC Pack group — hedge funds with ties to now-defunct hedge fund firm SAC Capital — with roughly $4 billion under management as of the end of 2017, according to a regulatory filing.

It was founded in 2009 by former SAC technology specialists Ryan Frick and Oliver Evans. Evans retired in July 2014.

Frick was a portfolio manager at SAC unit CR Intrinsic Investors, where he had spent four years. Evans spent two years at CR Intrinsic. Dorsal declined to comment.

Its flagship fund, Dorsal Capital Partners, lost more than 4 percent in October. As a result, it is down about 2 percent for the year to date, according to a hedge fund database. It posted single-digit gains in each of the two previous years, according to the same database.

The fund focuses on consumer and technology stocks, seeing both short-term catalysts and long-term trends, according to the database’s description of the fund’s strategy. It employs relatively low net and gross exposures.

Interestingly, the fund’s worst drawdown is 7.10 percent, surprisingly low for a tech-oriented fund. The firm’s $2 billion U.S. stock portfolio had 24 different positions at the end of the second quarter, according to its June 13F filing of U.S. equity holdings.

By far the firm’s biggest long position was Altaba, the part of the former iteration of Yahoo! that Verizon Communications did not acquire. At the end of the second quarter, the stock accounted for more than 11 percent of U.S. long assets.

In September, Altaba sold its remaining Yahoo Japan shares for about $4.3 billion. The company said it will use the proceeds from the sale of the shares to repurchase stock. It also announced a new share repurchase authorization of $5.75 billion.

The stock is down about 25 percent from its mid-June high, although it is up nearly 10 percent from its October 29 low.

Microsoft is Dorsal’s second-biggest long, accounting for 8.75 percent of assets at the end of June. The stock is up more than 30 percent for the year, including 7.7 percent since October 29.

Rounding out Dorsal’s top-five holdings are home improvement retail chain Lowes Companies, media giant Liberty Sirius XM Group Series C shares, and American Tower, owner of wireless and broadcast infrastructure.

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