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Arnaud Ajdler’s Engine Capital Management’s Returns, AUM, and Holdings

Liliana De la Torre

Arnaud Ajdler's Engine Capital Management is a value-oriented special situations fund based in New York City. It's a relatively young hedge fund, founded in 2013, and it provides its services to pooled investment vehicles. Currently, Arnaud Ajdler serves as the firm's Managing Member. In the years before Engine Capital Management, he has accumulated significant experience serving portfolio companies on strategic and operational leads. He has worked as a management consultant for Boston Consulting Group, Mercer Management Consulting, and Deutsche Bank, and as a director and on the compensation committee of Stewart Information Services. Moreover, Mr. Ajdler was the Chief Financial Officer, director and Secretary of Arpeggio Acquisition Corporation and Managing Director at Crescendo Advisors II LLC. Nowadays, he is also an Adjunct Professor at Columbia Business School where he teaches a course in Value Investing. He holds a B.S. in Mechanical Engineering from the Free University of Brussels, Belgium, an S.M. in Aeronautics from the Massachusetts Institute of Technology and an MBA from Harvard Business School.

[caption id="attachment_733253" align="aligncenter" width="473"] Arnaud Ajdler Engine Capital[/caption]

Arnaud Ajdler Engine Capital

Engine Capital Management mainly invests in small to mid-cap companies in the public equity markets of the United States and Canada. This value-oriented special situations fund focuses primarily on activism. It employs a fundamental, bottom-up long research looking for stable businesses with free cash flows and undemanding valuations in which exists a plan to correct the value gap.

The firm manages four private funds and aims to achieve substantial returns through the application of its strategy. For instance, the performance of its fund Engine Capital fund has had only one down year since its inception in 2013. Its first year, the fund achieved a return of 15%, followed by 2.8% in 2014. It was in 2015 when the fund lost 7.78%. However, it recovered during 2016 and 2017, returning 31.46% and 15.06% respectively. In 2018, as of October 29th (YTD), the fund's return was calculated at 2.50 %. Engine Capital Fund's total return amounted 67.86% with a compound annual return of 10.37%. Its worst drawdown was at 13.24.

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According to the firm's Plain Brochure from September 19th, 2018, it holds approximately $266.65 million in assets under management on a discretionary basis. At the end of the fourth quarter of 2018, Engine Capital Management disclosed a 13F equity portfolio valued at $170.25 million, which counted forty-eight positions, after adding nine and bumping ten. Even though the fund's holdings are diverse, none of them were among the 30 Most Popular Stocks Among Hedge Funds. Nevertheless, there were some exciting changes made this Q4 of 2018. Keep reading on the following page to find out more about that.

As of December 31st, 2018, the fund's largest holding was Quanta Services Inc (NYSE:PWR) which happened to be also one of its most important new acquisitions this Q4 of 2018. The fund purchased 675,583 shares with a value of $20.34 million. Quanta Services specializes in providing infrastructure solutions for the electric power, oil, gas and communication industries.

The second most significant holding was Hill International Inc (NYSE:HIL), which is also a relevant new addition. The fund acquired 5,555,256 shares valued at $17.11. Hill International provides services of program management, project management, and other consulting services to the building, transportation, environmental and industrial sectors. Other interesting positions added during this Q4 of 2018 were Resideo Technologies Inc (NYSE:REZI), the provider of safety and security solutions, in which the fund purchased 704,868 shares worth $14.49 million. Another one was Kbr Inc (NYSE:KBR) counting 364,018 shares acquired and valued in $5.53 million. Kbr is a provider of solutions and technology to different sectors; these services include systems engineering, test and evaluation, program management, maintenance, and field logistics.

Investor's optimism can be noticed with an increase of 7253%  in its stake in Everi Holdings Inc. (NYSE:EVRI) collecting 1,764,675 shares with a value of $9.09 million. Furthermore, it boosted its investment in Team Inc. (NYSE:TISI) by 4690% acquiring a total of 220,572 shares worth $ 3.23 million.

On the other hand, some of the fund's holdings shrank noticeably. For instance, its stake in Flex Ltd (NASDAQ:FLEX)  decreased by 99% counting 6095 shares worth $46.000. So was the case of Tech Data Corp (NASDAQ:TECD) with a reduction of 93% to 8,695 shares valued at $711.000.

At the end of Q4 of 2018, Engine Capital decided to sell the total of its 65,707 shares in Forest City Realty Trust (NYSE:FCEA) worth $ 1.65 million and its 94,004 shares in Avid Technology Inc (NASDAQ:AVID) valued at $557,000.

Disclosure: None

This article was originally published at Insider Monkey.