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Mangrove Partners’ Return, AUM, and Holdings

Nina Zdinjak

Back in 2010, Nathaniel August, an activist investor, decided it was time to launch his own hedge fund, and he named it Mangrove Partners after a tree species that has the ability to survive extreme weather conditions such as storms and hurricanes. The idea behind this name was to symbolically present hedge fund that is able to perform well even in harsh market environments. It turned out the name was fitting as the hedge fund that was launched with only $12 million in AUM became one of the best-performing in the previous years. In seven years since inception, its AUM grew to $780.3 million.

Nathaniel August had previously honed his investment acumen at White Eagle Partners where he was a director. He also worked at K Capital Partners, as an Investment Analyst, at Brahman Capital Partners as a Senior Analyst, and at Goldman Sachs’ Principal Investment Area as an Analyst. Interestingly, he had the opportunity to learn about investing when he was very young, as both his parents were involved in the industry. He graduated from Brown University with a B.A.

Mangrove Partners utilizes four core strategies: long/short, stressed and distressed, capital structure arbitrage, and liquidations and arbitrage. From its founding in 2013, the fund brought back an outstanding return of 44% annually. It returned 4.25% in 2013, strong 26.99% in 2014, pushing its average annual return to 20.6% between 2012 and 2014. 2015 was not so good, as its return dropped to a negative 1.88%.

Mangrove Partners’ Return, AUM, and Holdings

Nevertheless, it came back on its feet the next year, delivering an eye-popping 50.58%, making an average annual return between 2014 and 2016 of 23.3%, which secured it the second place among Barron’s top 100 hedge funds in 2017. That year it brought back 8.71%, averaging 17.2% between 2015 and 2017, being 16th among the top 100 hedge funds last year. The extremely difficult market condition in 2018, had an impact on the fund’s performance, as it had delivered -0.20% through September 2018.

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Our newsletters are successful because we follow hedge fund managers like Nathaniel August to identify the best and worst hedge fund stock picks. In this article, we are going to take a look at Mangrove Partners’ holdings in Q2 2019.

At the end of the second quarter of 2019, Mangrove Partners’ 13F portfolio was valued at $884.5 million, up 18% from $747.83 million in the previous quarter. During Q2, the fund dumped 15 stocks, and added 29, ending up the quarter with 85 long positions in its portfolio. It didn’t hold a single position in one of 30 Most Popular Stocks Among Hedge Funds in Q2 of 2019. Let’s take a look at its most interesting Q2 investment moves and positions.

Starting with positions the fund lost enthusiasm for and decided to sell. The most valuable stake it dropped during Q2 was in Stemline Therapeutics, Inc. (NASDAQ: STML) worth $8.18 million, on the account of 636,513 shares. The second-biggest position the fund sold during the quarter was in Savara Inc. (NASDAQ: SVRA) counting 813,615 shares with a value of almost $6 million. Mangrove Partners also said goodbye to its valuable positions in Crescent Acquisition Corp. (NASDAQ: CRSAU), Trine Acquisition Corp. (NYSE: TRNE-UN), and Thunder Bridge Acquisition II, Ltd. (NASDAQ: THBRU).

Click here to read the rest of this article, where we discuss Mangrove Partners' biggest second-quarter positions.

Disclosure: None

This article was originally published at Insider Monkey.