Michael Katz runs a relatively unkown hedge fund, Glenrock Global Partners, which has a spectacular long term record. The fund has returned 12.2% since inception in January 2000, versus 5% for the MSCI world index. The hedge fund is a long short value oriented alternative asset manager.
The firm is bearish on the US and has missed out on the subsequent S&P500 rally, with a YTD return of -2.6%. For April alone, the fund was down close to 5%.
As with many value firms, the fund is finding Europe to be an attractive place to invest. Glenrock is net short Japan, Asia ex Japan, USA and is net long Europe.
Interestingly, sources tell us that the firm is finding value in the Chinese Real Estate sector. Katz has purchased a basket of Chinese real estate stocks and is conducting further research for investments in individual equities.
Jim Chanos is extremely bearish on China, and David Einhorn also recently noted his bearish views on the banking system and real estate sector.
This contrasts with their negative outlook on most of the world.
The fund’s performance has historically been helped by fantastic short picks. In 2008, the shorts were up close to 40%, helping the fund produce a solid 12% return despite the S&P 500 plunge of close to 40%. Since inception shorts have returned over 5%.
In 2011, short bets have been going the opposite way. The long side of the portfolio is up 11%, but the short book is down 13%, which has resulted in a 2% plus loss for the year so far.
Precious metals seem to be a favorite, as the sector is one of the only sectors which have a net long exposure.