Update: (From Reuters) Michael Karsch is apparently planning a consulting firm for the likes of Stanley Druckenmiller, according to people close to the matter.
Another hedge fund is closing shop. Michael Karsch of Karsch Capital Management intimated to his investors that he is wrapping up his hedge fund, according to a letter seen by Bloomberg’s Katherine Burton. The equity long/short value fund has been in business for thirteen years and has returned 94% since its inception, which compares with the 55% return on S&P 500 in the same period.
Michael Karsch is planning to return 95% of assets of the $1.8 billion fund back to clients until the end of next month, while the rest will be distributed till January.
Karsch making profits in Vodafone
Karsch said that after working for twenty years as an investment manager, he wants to take time to reflect on what to do next. Karsch has previously worked as a managing director at Soros Fund Management and as a portfolio manager at Chieftain Capital. Karsch Capital Ltd., the flagship offshore fund, has returned 6.1% for the year until August 23. The long-only fund has returned 16% in the same period. In a Q1 conference call, Karsch discussed his investments in Vodafone Group Plc (NASDAQ:VOD) (LON:VOD) and Yahoo! Inc. (NASDAQ:YHOO), and called them high-potential stocks.
There is some irony here, as Karsch has repeatedly said that Vodafone’s most valuable asset is its major stake in Verizon Communications Inc. (NYSE:VZ), whose sale could generate loads of cash. Just a day after he stated that he is closing shop, Vodafone is in fresh talks with Verizon about the sale of its stake, which could generate as much as $130 billion for the British company. Shares of Vodafone are up over 8% from this news today, so Karsch is making some neat profits here if he has not already exited the position.
Karsch bought Vodafone Group Plc (NASDAQ:VOD) (LON:VOD) in Q2, and roughly increased his holding in Yahoo! Inc. (NASDAQ:YHOO) by 200% in the same quarter. Karsch Capital was also short in E I Du Pont De Nemours And Co (NYSE:DD), which recently became a major bullish position of Trian Partners’ Nelson Peltz.