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ACK Asset Management’s Returns, AUM, and Holdings

Nina Zdinjak

ACK Asset Management is a Scarsdale-based hedge fund co-founded by Richard S. Meisenberg and John Henry Reilly III back in 2005. The pair serve as co-portfolio managers for the firm, with Richard Meisenberg being a partner with 51% ownership of the fund and John Henry Reilly III holding the remaining 49%. Prior to launching his own firm, Richard Meisenberg worked at Oppenheimer & Co. and Smith Barney as an analyst in charge of small- and mid-cap stocks, and was also a founding partner at Palisade Capital Management. He holds a B.S. in Marketing from New York University. Before co-founding ACK Asset Management with Richard Meisenberg, John Henry Reilly III was a Managing Director and Senior Equity Analyst at CJS Securities, Inc. He was in charge of forming and controlling financial models for predicting cash flows and earnings of small-cap companies. He earned his B.A. in Economics from Fordham University and was named ‘Home Run Hitter’ by Institutional Investor Magazine in 2002.

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It is only natural that the fund’s investment strategy is centered around small-cap and mid-cap companies, as both co-founders have proficiency in these types of equities. That’s why among its holdings you won’t find any of the 25 Most Popular Stocks Among Hedge Funds in 2018. ACK Asset Management employs a long/strategy and cyclical analysis, and has generated positive returns throughout the years.

Its ACK Asset Partners LP fund has been a steady performer over the last 5 years, generating an impressive 22.72% in 2013, followed by 5.37% returns in 2014, 5.06% in 2015, 5.77% in 2016, and 9.92% in 2017. The fund also survived the brutal October bear market to hold on to gains of 6.75% this year through October 29. Its total return was 338.05% for a compound annual return of 12.12%, while its worst drawdown amounted to 16.14. As per ACK Asset Management’s plain brochure, it managed around $500 million of client assets on a discretionary basis on December 31, 2016.

Insider Monkey’s flagship strategy identifies the best performing 100 hedge funds at the end of each quarter and invests in their consensus stock picks. This way it is always invested in the best ideas of the best performing hedge funds and is able to generate much higher returns than the market. Since its inception in May 2014, our flagship strategy generated a cumulative return of 96.9%, beating the S&P 500 ETF (SPY) by over 40 percentage points (see the details here).

During the third quarter, the fund made some changes to its equity portfolio, adding 4 new stocks to it and dumping 10 stocks. At the end of the third quarter, the fund’s equity portfolio was valued at $363.96 million. You can read more about these changes on the next page.

The largest two positions in ACK Asset Management’s portfolio at the end of the third quarter were in Astronics Corporation (NASDAQ:ATRO) and EnerSys (NYSE:ENS), which occupied 11.74% and 10.32% of its portfolio, respectively. In Astronics Corporation (NASDAQ:ATRO), the fund held 983,099 shares outstanding that were worth around $42.77 million. The fund raised its stake in EnerSys (NYSE:ENS) by 10% during Q3 to 431,411 shares, valued at $37.59 million.

Out of the four new positions added to ACK's 13F portfolio, the biggest was in composite wind blades manufacturer TPI Composites Inc (NASDAQ:TPIC), with the fund acquiring 325,000 shares of the company worth $9.28 million on September 30. This was followed by an investment in Century Communities Inc (NYSE:CCS), as the fund bought 160,000  shares valued at $4.2 million at Q3's end. Two other companies also attracted a lot of interest from ACK Asset Management during the third quarter. One was Forrester Research, Inc. (NASDAQ:FORR), in which the fund boosted its stake by 159% to 193,600 shares, worth $8.89 million. Another was Valmont Industries, Inc. (NYSE:VMI), in which the fund raised its stake by 45% to 140,000 shares valued at $19.39 million.

ACK Asset Management did seemingly start to lose faith in some of the companies in its portfolio during Q3. It has decreased its stake in Covenant Transportation Group, Inc. (NASDAQ:CVTI) by 61% to 100,000 shares and more than halved its stake in Manhattan Associates, Inc. (NASDAQ:MANH) to 50,000 shares. The biggest positions the fund decided to drop in the third quarter were its holdings in Continental Building Products Inc (NYSE:CBPX) and Milacron Holdings Corp (NYSE:MCRN), saying goodbye to 731,891 shares of CBPX and 801,800 shares of MCRN.

Disclosure: None