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Darsana’s Double-Digit Gain in January Matches 2018 Performance
The firm’s $2.4 billion portfolio of long U.S. stock bets was spread across just 12 companies at the end of last year, according to a regulatory filing.
Anand Desai's Darsana Capital Partners has been a top-performing long-short manager for more than two years, producing double-digit returns since 2017.
The hedge fund firm returned 11.9 percent in January, after posting the same gain for 2018, according to a person familiar with Darsana's performance. Last year was turbulent for stock markets, with the S&P 500 index posting a 6.2 percent loss.
Desai, a former Eton Park Capital Management partner, created a buzz in hedge fund circles when he founded Darsana in 2014 with $1 billion of capital. His fund posted roughly flat results in 2015 and 2016, before returning 20.5 percent in 2017, according to the person familiar with its performance.
Darsana now manages about $3.5 billion, the person said. The firm declined to comment.
Desai was previously a senior managing director and founding partner of Eton Park, the multistrategy hedge fund firm founded by former Goldman Sachs Group partner Eric Mindich. Desai, who worked at Eton Park from 2004 through 2013, sat on the firm's operating committee and ran its fundamental long-short equity and structured-credit investing. Mindich shuttered Eton Park in 2017.
Darsana is known for making very concentrated bets on a small number of individual stocks globally, taking a bottom-up approach. According to a regulatory filing, the firm seeks to identify companies and industries undergoing significant secular changes where it has a differentiated view of potential outcomes. The firm says in the filing that it also makes short-term investments to generate “absolute returns.”
Darsana last year made money on both the long and short sides of its book, according to the person familiar with the firm's performance.
At the end of last year, Darsana's $2.4 billion portfolio of long U.S. stock bets was spread across just 12 companies, according to its most recent 13F filing shows. The three largest positions accounted for more than 47 percent of the assets.
Darsana has held all of its nine largest positions since at least the third quarter of 2017, according to regulatory filings. The firm did not establish any new positions in the fourth quarter.
Spirit AeroSystems, a maker of large commercial aircraft structures, was by far its largest long position at the end of last year, according to its most recent 13F filing. The holding accounted for more than 20 percent of the U.S. long assets, the filing shows.
Darsana has held Spirit for four years. The company has been the hedge fund firm's largest long every quarter for at least the past two years.
Shares of Spirit were up about 16 percent in January, after dropping about 17 percent last year. The stock has soared about 155 percent since the end of the third quarter of 2014, before Darsana took its initial position.
Bank of America Corp. was Darsana's second largest long at the end of December, accounting for nearly 15 percent of U.S. assets after the hedge fund more than doubled its stake in the banking giant during the fourth quarter, according to the 13F filing. During the previous quarter, Bank of America was the hedge fund's firm's seventh largest long.
The bank's shares were up 15.5 percent in January, after dropping 15 percent last year.
New York Times Co. was Darsana's third largest long in the fourth quarter, slipping from its second biggest holding, the filing shows. The media company's stock surged 15.5 percent in January, after jumping 21 percent last year.
Darsana's fourth largest long at the end of last year was Autodesk, a maker of 3-D design software. Shares of the company rose more than 14 percent in January, after increasing more than 23 percent in 2018.
In the fourth quarter, Darsana liquidated four positions: Netflix, Facebook, T-Mobile and discount retailer Dollar Tree.