According to a recent exchange with Reuters, a person close to the situation has detailed that SahmAdrangi, founder and Chief Investment Officer of Kerrisdale Capital Management, plans to short a single stock, which to date, remains unnamed. This new fund has been recently coined as a co-investment and is unlike any previous deal. It is not uncommon for hedge fund managers to raise capital in order to recover failing energy companies or residential mortgage-backed securities, but for such a small New York-based company, this new move appears to be unique. In an email sent by SahmAdrangi to his investors, he detailed that his belief that Kerrisdale Capital Management’s ability to garner such significant backing in a short period of time has really resonated with the alternatives community. The unnamed target company has also been described by Mr. Adrangi as being worth north of $10 billion, and in an effort to continue to gain support for his thesis, he has been working hand in hand with Kerrisdale analyst, Shane Wilson, on a video, website, and a report that will further back his claims. An anonymous source has also leaked details about the impending deal, revealing that the target company will be revealed in May, as the company has already begun buying stock in the unnamed company in order to establish positioning.
Mr. Adrangi is currently the founder and Chief Investment Officer of Kerrisdale Capital Management, having overseen the day-to-day operations extensively since its inception in 2009. Mr. Adrangi began the company on a budget of less than $1 million, and the fund now manages approximately $500 million. He began to create a name for himself after successfully shorting fraudulent Chinese companies in 2010 and 2011. China Marine Food Group, Lihua International, and China-Biotics are a few of the companies that he has exposed over the years. After Mr. Adrangi targeted the companies, China Education Alliance and ChinaCast Education Corp, the Securities and Exchange Commission issued sanctions that changed their methods of operation. Through Mr. Adrangi’s continuous efforts, Kerrisdale Capital Management has continued to grow and has averaged a 28% rate of return on investment through 2016.