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New Managers November 2019

PROFILES: Safehouse Capital, 50 South Capital

 

Safehouse Capital launches thematic consumer fund

A new fund has launched in Dubai with a global focus on the consumer sector. Safehouse Capital is led by Sharif Farha and was started in 2018 after Farha moved on from Amwal Capital Partners where he was a senior analyst covering the consumer sector. Mahindar Kumar serves as the senior analyst, joining from star Asian mutual fund AKD Investment PK. Farha tells Opalesque New Managers that he wanted to create a thematic fund that focuses on the rise of the consumer which he believes will be a major trend over the next 20+ years.

"Dubai is a great place to be with our focus," Farha says. "You get an idea of consumer trends much faster here than other cities because the population is global and it also skews younger." He adds that there is strong demand from investors in the region for thematic funds that have a global tilt.

In terms of strategy, the long/short fund is looking for companies have proven they are able to adapt to shifting consumer trends on the long side and companies where time is running out, or are facing negative catalysts on the short side. A company like Foot Locker is an example of the adaptability Farha is looking for. Foot Locker is reckoning with less in-store traffic by revitalizing its stores and creating unique experiences for consumers to bring them back in. Lighter company Bic is an example of a recent short bet. "If you look at the trend, smoking is going down, vaping is replacing some of it. We don't see where the product growth is going to come from," he explains.

Safehouse announced a short on Aston Martin over the summer as well, citing an ill-conceived IPO and a lack of alignment with shareholder value. When asked what trends he's eyeing for 2020, Farha says gaming and esports are significant new growth areas for consumer discretionary stocks. "We're still in early innings," he says. "We expect to se......................

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This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.
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