Friday, 26 August 2016
Last updated 8 hours ago
Aug 10 2012 | 1:29pm ET
The Varus Fund, a Swiss-based long/short hedge fund specializing in German mid and large-cap companies, is up 3.06% in July.
That puts the fund down 6.04% year to date and up 38.6% since inception.
In their monthly letter to clients, Varus founders (and Absolute Capital Management veterans) Stefan Heieck and Frank Siebrecht characterize the July numbers as “an excellent risk-adjusted July result with minus 6.2% average net exposure.”
“We bought Siemens into their weak Q2 figures on 26 July 2012 in anticipation of a special dividend later this year. The Siemens shares increased by 15% supported by their surprise share buyback announcement vs. bond placement—don`t worry, be happy if you are able to buy Germany`s largest company with a market cap of EUR 68 billion at the right time of the year.”
In H2, the managers say, they expect to profit from short bonds versus high-yield and share buyback stocks, citing companies like Adecco and Siemens which have already issued bonds to finance buybacks of their own shares and listing a number of others (including Adidas and Software AG) which they believe may follow suit.