market folly

While we typically cover prominent hedge fund managers (like John Paulson) here on Market Folly, we're trying to also focus on some talented up and coming managers to follow over the long haul. We recently covered the latest investor letter from Kevin Byun's Denali Investors and today we're turning to Sahm Adrangi's Kerrisdale Capital.

This is the first time we've covered Kerrisdale and we wanted to post up their first quarter 2010 investor letter. Kerrisdale performs rigorous bottom-up fundamental research on public equities and employs a long/short strategy. They are a value oriented and special situations investment manager. You may have seem some of Adrangi's investment analysis write-ups scattered around the internet as they are some of the most detailed we've seen. We'll also attach his latest thoughts on Intercontinental Exchange (ICE) below.

For the first quarter, Kerrisdale was up 17.8% net of fees and the performance speaks for itself. In their letter, Kerrisdale touches on select investments including Ruth's Hospitality Group (RUTH) and DJSP Enterprises (DJSP) Warrants. Additionally, Adrangi discusses his previous bearish stance on the solar industry and argues that solar PV cell makers were "commodity manufacturers operating in an environment suffering from massive and growing oversupply." Solar shorts were 36% of their short book at the end of March. Kerrisdale's largest solar short positions are in Q-Cells (QCE), First Solar (FSLR) and Suntech Power (STP). This is a rare look into a firm's short side of the portfolio as many often keep these investments guarded close to the vest.

Embedded below is Sahm Adrangi's Kerrisdale Capital's first quarter letter to investors:



You can directly download a .pdf here.


Additionally, if you wanted to get a sense of Kerrisdale's research process, we highly recommend checking out Adrangi's recent write-up on shares of Intercontinental Exchange (ICE). The document is embedded below:



You can also download a .pdf here.

That wraps up our coverage of Sahm Adrangi's Kerrisdale Capital. If you found their ICE write-up insightful, then we'd recommend checking out their blog where they often post up their investment theses. For more investor letters from talented investment managers, we recently covered Kevin Byun's Denali Investors and hedge fund Ellington Management's 2010 equity outlook.