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Hudson Bay Capital Management’s Return, AUM, and Holdings

Nina Zdinjak

Hudson Bay Capital Management is an NYC-based hedge fund that was launched in 2005 as a successor to Gerber Asset Management, a proprietary investment company. Both firms were founded by the same person – Sander Gerber, who is the current Portfolio Manager, Managing Partner, CEO, and CIO of Hudson Bay Capital Management. Last year, the fund opened an additional office in London, wanting to broaden its investment operations in Europe. Before forming Gerber Asset Management, Sander Gerber was an options market maker at the American Stock Exchange, prior which he worked at Bain & Company as an Associate Consultant. He graduated with a BSE cum laude in Finance from Wharton and with a BA in Humanistic Philosophy from the College of Arts and Sciences.

What makes Hudson Bay Capital Management unique is its special and meticulous investment process called “The Deal Code System” which was developed by it founder, Sander Gerber. This system plays a crucial role to its investment philosophy while the fund is known for utilizing multiple investment strategies often leaning towards "catalyst-driven absolute return strategies". With more than 25 years of professional investing experience, Sander Gerber can successfully handle a variety of securities classes and derivatives, by utilizing the best strategy required at the moment. As per the latest data we were able to attain, Hudson Bay Capital Management had $2.8 billion in assets under management in June last year.

[caption id="attachment_735677" align="aligncenter" width="473"] Sander Gerber of Hudson Bay Capital[/caption]

Sander Gerber of Hudson Bay Capital

Let’s observe the fund’s most recent return figures in order to determine how did its investment strategy work out. In 2013, its Hudson Bay Fund L.P. brought back 8.61% for the year, which was followed by a 2.53% and 1.66% loss in 2014 and 2015, respectively. 2016, was the year when the fund started to get back on its feet, delivering 4.63%, and getting stronger in 2017 with a return of 9.27%. Even though tough last year’s market environment, it didn’t manage to hurt the fund much, at least not through October through which the fund generated a return of 6.91%. Hudson Bay Fund’s total return amounted to 272.02% for a compound annual return of 10.85%. Its worst drawdown was 6.04.

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At the end of March 2019, Hudson Bay Capital Management’s equity portfolio carried a value of $7.76 billion, up from $7.46 billion it was valued at the end of the previous quarter. Its portfolio was very diversified and during the quarter the fund made many changes to it. In this article, we are going to highlight its most important investment moves made in Q1 2019, starting off with the biggest sold out positions.

The most valuable stake Hudson Bay Capital Management said goodbye to in the first quarter of 2019 was in Anthem, Inc. (NYSE:ANTM). This position was worth $47.89 million, on the account of 181,572 shares. The fund also sold out its positions in Dell Technologies Inc. (NYSE:DELL) worth 39.44 million and counting 807,084 shares.

During the first three months of 2019, the fund decided to boost and to lower some of its holdings. For instance, it raised its stake in Takeda Pharmaceutical Company Limited (NYSE:TAK) by 3903% to 630,338 shares worth $12.84 million, comprising 0.16% of its portfolio. It also boosted its stake in Danaher Corporation (NYSE:DHR) by 2041% to 318,887 shares with a value of $42.1 million.

Among the stocks Hudson Bay Capital Management started to lose faith for, were Global Payments Inc. (NYSE:GPN), and UnitedHealth Group Incorporated (NYSE:UNH). During Q1 2019, the fund lowered its stake in Global Payments by 98% to 3,116 shares with a value of $425,000, and it also trimmed it stake in UnitedHealth Group by 96% to 7,550 shares, worth $1.87 million.

Click here to read the rest of this article where we take a look at Hudson Bay Capital Management’s most valuable first quarter positions.

Disclosure: None

This article was originally published at Insider Monkey.