Pennant Capital’s Winward Fund returned 5.5 percent in Q1 after adding a 1.44 percent return in March. The fund is managed by Lee Atzil, Joerg Diedrich and the founder himself, Alan Fournier. Pennant Capital’s Broadway Gate fund returned 6.78 percent in last quarter and the fund added a 1.49 percent return in last month.
Broadway Gate is managed by Lee Atzil and Joerg Diedrich. Pennant Capital Management has over $7.7 billion in asset under management. Pennat Capital registered with CFTC in March as a Commodity Pool Operator which will allow it to invest in commodities and derivatives above certain levels.
Pennant has a short position in yen. Alan Fouriner believes that Japan has put itself in a fix where it seems impossible to service debt if the government achieves an inflation target of 2 percent. Other than profits from short yen positions, the fund gained from shorts in Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V), which seems to be below threshold level of 0.5 percent of Nokia’s equity, because we haven’t seen Pennant’s position in Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) among the short disclosures from Europe.
Pennant Capital also gained from shorts in NIKON CORPORATION (TYO:7731) and Polypore International, Inc. (NYSE:PPO), while losing in short positions in Safeway Inc. (NYSE:SWY), Cree, Inc. (NASDAQ:CREE) and Delhaize Group (NYSE:DEG)(EBR:DELB). Pennant’s other shorts that have been unprofitable for the fund have been in Neopost SA (EPA:NEO), AIXTRON SE (NASDAQ:AIXG), TUI AG (PINK:TUIFY) (ETR:TUI1) (FRA:TUI1) and William Hill plc (LON:WMH), whereas short in OUTOKUMPU OYJ (PINK:OUTKF) has been profitable for the fund, according to their respective stock performance in Q1.
Broadway Gate’s managers have a pronounced bearish outlook on eurozone which is signified by its short position in SPDR EURO STOXX 50 ETF (NYSEARCA:FEZ). The fund sees the troubled future of Italy and the crisis in Cyprus as developments that will hinder growth in the EU countries.
On a comparative basis, the fund is bullish on US stock market. Broadway Gate decided to exit Family Dollar Stores, Inc. (NYSE:FDO) and WellPoint, Inc. (NYSE:WLP) in the first quarter. The fund’s managers have limited faith in WellPoint’s new CEO and are not confident about Family Dollar’s ability to navigate through the changed macro environment. On the other hand, Pennant remains invested in FDO’s competitor Dollar General.
The quarterly letter remarks on the growth potential of MRC Global which makes up 4.3 percent of the fund’s assets. MRC Global Inc (NYSE:MRC) is the largest supplier of pipes, valves and fittings in the energy industry. Pennant thinks that the company has significant upside because of its large market share as a distributor and has a couple of great contracts signed up.
The equity is expected to grow by 20 percent on an annual basis according to Pennant’s analysis.