Karsch Capital Management, a hedge fund based in New York, was founded in the year 2000, by Michael Karsch, and manages approximately $2.5 billion in Assets.
The hedge fund was down 2.0% in the second quarter, bringing the year to date return to 4.3.%. Karsch gained 1.3% in July.
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Karsch Capital Management reported an average net exposure of about 40%, from its invested level of 100-70% long and about 30% short. The firm reported an underperformance on its long positions in the financials sector, while returning strong performance from consumer, retail, Internet, and hedges, after it generated approximately 125, 70, 10, and 20 gross basis points from the sectors, respectively.
The company is Bill Ackman’s SPAC long Justice Holdings Ltd (LON:JUSH) (NASDAQ:JSTUF), eBay Inc (NASDAQ:EBAY), Ashland Inc. (NYSE:ASH), News Corp (NASDAQ:NWSA) (NASDAQ:NWS), and American Eagle Outfitters (NYSE:AEO), which were also the leading contributors for the realized gains. The main detractors for Karsch Capital Management’s long positions included Health Net, Inc. (NYSE:HNT), E TRADE Financial Corporation (NASDAQ:ETFC), and Humana Inc. (NYSE:HUM).
Karsch Capital Management is short Pentair, Inc. (NYSE:PNR), Li & Fung Limited (HKG:0494), QBE Insurance Group Limited (ASX:QBE), Manpower Inc (NYSE:MAN), and Mapfre SA (MCE:MAP), and these companies were major detractors during the second quarter in 2012.
Karsch has also sought to add on the short side Brazilian banks, Japanese electronics manufacturers, and companies with broken business models in the restaurant and waste industries.
The company launched a UCIT, valued at $230 million, slotted to run pari passu with the flagship fund, following the closure of the credit fund, as covered in one of our articles.
The chairman and founder of Karsch Capital Management, Michael Karsch, likes Express Scripts Holding Company (NASDAQ:ESRX), Tyco International Ltd. (NYSE:TYC), and American International Group Inc. (NYSE:AIG), which he perceives to have great growth prospects, noting that its stock is 0.5X the book value, highlighting that the insurance giant is also in the process of buying back its assets.