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A Hedge Fund Vet Makes a Fresh Start in the Pandemic

John Thaler’s Hampton Road has forged a partnership with Jefferies division Leucadia after a year of double-digit returns.

It’s been a good 2020 for John Thaler, who decided to stage a comeback in January after shutting down JAT Capital in 2015.

After delivering eye-popping returns so far this year, Thaler’s new firm, Hampton Road Capital Management, is forming a strategic relationship with Leucadia Asset Management, the asset management division of Jefferies Financial Group. Leucadia will invest capital in Hampton Road’s long-short equity strategy, which is focused on technology, media, telecommunications, and consumer sectors globally. 

According to an investor letter distributed early Friday and obtained by Institutional Investor, Hampton Road is up 39.4 percent net year-to-date through December 10. The fund has garnered $250 million in assets under management so far, according to sources. 

[II Deep Dive: A Hedge Fund Veteran Mounts a Comeback]

“Leucadia will be beneficial to us as we scale our business over time and will allow us to concentrate on investing,” Thaler said in a statement. “Our team is very excited about the opportunities we are seeing in our core sectors on both the long and short side. We are pleased with the results we have delivered in our strategy this year and are optimistic about the future.” 

Thaler returned to fund management early this year, joining Wexford Capital as a portfolio manager of the Wexford Core Equities Fund. In August he spun out the fund and renamed it Hampton Road Capital Management.

Thaler has ties to Julian Robertson Jr.’s Tiger Management through his work at Shumway Capital, a firm founded by a former Tiger analyst. He launched JAT Capital in 2007, specializing in the kinds of tech and media stocks popular with Tiger alumni. He produced feast-or-famine returns at JAT, putting up double-digit gains in every one of his profitable years. However, it also mounted double-digit losses of 11.3 percent in 2014 and 19.6 percent in 2012. Thaler closed JAT Capital in 2015 after eight years in business.

“John Thaler has been investing in the TMT sectors for two decades,” Nick Daraviras and Sol Kumin, co‐presidents of Leucadia Asset Management, said in a statement. “He has had demonstrable success generating alpha on both the long and short side, which is challenging to find these days. Hampton Road runs with low net exposure and seeks to generate high idiosyncratic returns, which is why we believe their strategy will be well positioned regardless of the volatility backdrop in TMT in the years to come.”

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