Thursday, 27 October 2016
Last updated 11 hours ago
Oct 31 2013 | 11:32am ET
This year has been a bloodbath for short-biased hedge funds, but that hasn't dissuaded David Bonnier and Mike Monnelly.
The two, who cut their teeth at short-selling specialist Kynikos Associates, have launched their own dedicated short-bias fund. Arhammar Global Capital Management's maiden fund, Short Alpha, debuted on Oct. 10 and will invest in between 30 and 50 shorts, with indices used to hedge, Bloomberg News reports.
Arhammar will invest exclusively in developed markets, using a bottom-up analysis. There will be four themes in the portfolio: aggressive accounting, boom-that-goes-bust, consumer fads and structurally-challenged business.
"Today, there's a lot of frustration that there are not many places to invest your money because either equity is expensive, or real estate is expensive, or fixed income is expensive," Bonnier told Bloomberg. "Today, the number of dedicated short-biased funds”—which are down by double-digits on average this year—"has diminished considerably in the last 10 to 15 years."
The London-based firm has been seeded by Sweden's Skandinaviska Enskilda Banken.
Bonnier said the firm is named after the Swedish town where he vacations. And, like short-selling in 2013, "it's really very much off the beaten path," Bonnier said. "That's very much in line with our strategy."
Both Bonnier and Monnelly were London-based analysts for New York-based Kynikos. Monnelly left the hedge fund in 2009 to join Boston-based GMO LLC, while Bonnier left last November.