Hayden Capital performance update for the fourth quarter ended December 31, 2020.
Dear Partners and Friends,
Hayden Capital Performance Update
Please see the following table for our quarterly performance update.
During the fourth quarter of 2020, Hayden's partners realized a +22.1% return on their investments, compared to +12.2% for the S&P 500 and +14.4% for the MSCI World indices.
This brings our full year 2020 returns to +222.4%, versus the S&P 500's +18.4% and MSCI World's +16.3%. We have generated a +32.8% annualized return for our partners, since inception.
What a year 2020 has been! We were fortunate that in a year of such turmoil, we were able to provide value to our partners.
These results are a reflection of our underlying companies' teams (everyone from the CEOs to rank-and-file employees) who executed masterfully during the past year. Although no one could have predicted the extent Covid would have on the economy and consumer behavior, our companies were fortunate to be in a position of strength going in. When combined with nimble corporate cultures, this allowed them to react quickly to the changing environment and provide services to their customers at a time that competitors were still scratching their heads as to how to move forward.
Goodwill Will Be Repaid By Loyal Customers
Mark my words, the goodwill earned during such a tumultuous period will be repaid by loyal customers and ingrained consumer habits for many years ahead. If anything, this period has provided evidence that the decentralized & digital nature of many internet-based businesses, are in fact more resilient (i.e. less risky and hence more valuable) than competing models relying upon physical infrastructure. This anti-fragility still seems to be underappreciated by most investors, but that's starting to change slowly.
I'm excited for what 2021 will bring (with hopefully the ability to travel again later this year too). We plan to publish our Q4 2020 investor letter next month. Meanwhile, I hope you had a chance to spend time with your families this holiday, and we'll have a chance to meet in person again soon.
Fred Liu, CFA