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From Precy Dumlao, Opalesque Asia:
Kerrisdale Partners LP, a fund managed by New York-based investment management firm Kerrisdale Capital, is getting huge rewards shorting U.S.-listed Chinese firms which they believe "are falsifying their financial statements" when submitting them to the Securities and Exchange Commission.
The decline of these firms had been very profitable for Kerrisdale, giving the fund triple-digit returns over the past nine months. "This sector [U.S.-listed Chinese firms that allegedly falsify financial statements] has driven our returns over the past three quarters, during which we are up 255%, net of fees," Kerrisdale said in an investor communication obtained by Opalesque.
In the report, Kerrisdale said the fund was up 44.8% net of fees in the second quarter of the year, bringing the fund’s returns at half-way into 2011 to +150.8%. The fund returned +27.8%, +9.0%, and +3.9% for April, May, and June respectively. In comparison, the S&P 500 was up +0.1% over the quarter, comprised of monthly returns of +3.0% (April), -1.1% (May), and -1.7% (June). Since the fund’s inception in June 2009, it has returned +478.5% net of fees and +678.2% gross of fees, while the S&P 500 was up +49.6% during the same period.
"Our top five positive contributors were all shorts in U.S.-listed Chinese reverse merger frauds. Our top five negative contributors were Aeropostale, Ame...................... To view our full article Click here
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