Horos Asset Management, an investment management firm, published its second-quarter 2021 investor letter – a copy of which can be downloaded here. Horos Value Internacional gained 6.3% over the quarter, compared to 6.4% in its benchmark index, while Horos Value Iberia returned 4.8%, beating the 4.2% rise of its benchmark. You can take a look at the fund’s top 5 holdings to have an idea about their top bets for 2021.
In the Q2 2021 investor letter of Horos Asset Management, the fund mentioned Brookfield Property Partners L.P. (NASDAQ: BPYPN) and discussed its stance on the firm. Brookfield Property Partners L.P. is a Hamilton, Bermuda-based commercial real estate company. BPYPN delivered a 9.70% return since the beginning of the year, while its 12-month returns are up by 29.62%. The stock closed at $23.34 per share on September 21, 2021.
Here is what Horos Asset Management has to say about Brookfield Property Partners L.P. in its Q2 2021 investor letter:
“Brookfield Property Partners (“BPY”) was involved in a takeover bid process launched by its controlling shareholder, Brookfield Asset Management. Likewise, BPY also saw an improvement in the price offered by the company. However, in this case, as the IPO price was more reasonable (a discount over NAV around the historical average) and as we found new and more attractive investment ideas, we decided to liquidate our position during the quarter.”
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Based on our calculations, Brookfield Property Partners L.P. (NASDAQ: BPYPN) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. BPYPN was in 17 hedge fund portfolios at the end of the first half of 2021. Brookfield Property Partners L.P. (NASDAQ: BPYPN) delivered a -6.10% return in the past 3 months.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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Disclosure: None. This article is originally published at Insider Monkey.