Andrew Lahde of Lahde Capital has a lot to be thankful for this holiday season. The firm’s residential and commercial real estate hedge funds had another “off-the-charts” month and Lahde is prepping a third hedge fund dubbed the Short Credit Fund to be launched next week.
The firm’s flagship U.S. Residential Real Estate Hedge V and its second fund, Commercial Real Estate Hedge, which launched on Sept. 1, have returned an eye popping 1,000% and 80%, respectively, year-to-date as of Nov. 21, according to the firm’s latest performance figures. Both funds are currently closed to new investors.
In his latest missive to investors, which was obtained by FINalternatives, Lahde said the current results for the residential fund “have exceeded every estimate that I ever offered any investor” and now is the time for investors to “take some money off the table.” Currently, the fund’s Class A and Class B portfolios hold short positions in AA tranches down to BBB- on the ABX Index.
“We believe that all of these positions have further downside. However, the risk/return characteristics are far less attractive than they have been in the past. We do not plan on adding any positions at current levels. If the ABX indices were to bounce, we may short them again,” wrote Lahde.
He added that he is closing out his positions in BBB- positions within the next 90 days and holding onto only As and AAs, which will “take a while to disintegrate, but it is my belief that they too are worth zero.”
Lahde said that his earlier decision to go “all in” and invest his entire net worth into the residential hedge fund has “obviously paid off nicely” and he has redeemed some of his investments in both classes to fund the growth of Lahde Capital and to buy gold and other precious metals as a hedge against the “currency printing presses of governments around the world.”
He is re-investing the firm’s performance fees into the commercial real estate fund or his latest offering, which he said has received a “warm” welcome from institutional investors. “The focus will simply be shorting credit. There is plenty of bad credit left out there to short. We just need a vehicle through which we can short it,” said Lahde.
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