Back in 2001 Matt Sirovich and Jeremy Mindich founded institutional alternative asset management called Scopia Capital. The fund is based in New York City, and it has around $11.37 billion in asset under management (December 2016). It provides investment management services with a long/short value driven, market-neutral approach or long only investment management for institutional investors. Before co-founding Scopia Capital, Matt Sirovich was employed by Merril Corporation as a Vice President of Global Marketing, and he also worked at DLJ Merchant Banking II as a Managing Director, at Donaldson, Lufkin & Jenrette as a Vice President, at Concord Camera Corp as a Financial Manager. Whereas the beginnings of his career in investing were at Drexel Burnham Lambert Inc, where he served as an analyst. Matt Sirovich is also a philanthropist, being on the board of the Bowery Residents’ Committee, which offers help to homeless people of New York City. He earned an M.B.A. from Harvard Business School.
The second co-founder of Scopia Capital, Jeremy Mindich, previously worked as a Partner at Porter Felleman, where he helped manage finances and gained professional experience in the analysis of emerging technologies. He was also an Advisor at Sarona Asset Management, and in 2007 he co-founded Propel Capital that invests in entrepreneurs and innovators. Jeremy Mindich is also the Owner and General Manager of Huguenot Street Farm. Before he stepped into the world of investments, he had a very successful career in freelance journalism. He graduated Phi Beta Kappa from Wesleyan University with a B.A. and he also earned an M.P.A. from the Harvard Kennedy School of Government as a Starr Fellow.
Scopia Capital’s investment philosophy relies on four strategies: “long-short equity strategy managed with the discipline of market neutrality, a long-short equity strategy managed with net long exposure, a long-only equity strategy and a long-short health care focused strategy.” It usually runs in-house research about the companies and holds a concentrated portfolio of both long and short positions carefully picked with the practice of market neutrality. Scopia Capital’s investment strategy turned out to be very productive delivering 11% in 2013, followed by a return of 12% in 2014. Let’s take a look at the fund’s more recent return figures.
For instance, its Scopia PX fund delivered 11.1% in 2013 and 8.1 in 2014. It’s Scopia Long LLC fund brought back an eye-popping return of 41.18% in 2013, followed by an 11.70% gain the next year. It continued to deliver a positive return in the following year, achieving 1.40% in 2015, 5.87% in 2016, an impressive 17.62% in 2017. Last year through October, Scopia Long LLC fund managed to stay positive, bringing 1.28%. Its total return amounted to 348.16% for a compound annual return of 11.53%, while its worst drawdown was 42.14.
It’s Scopia Health Care LLC fund, which focuses on the companies related to the healthcare industry, brought back 4.16% in 2015, and 4.49% in 2016. Then, the next year was more favorable for the fund in terms of performance, with Scopia Health Care LLC delivering a solid 21.89%. 2018 brought some challenges as the fund lost 0.83% through October 2018. Its total return was 31.56%, for a compound annual return of 8.36%, whereas its worst drawdown stood at 11.78.
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At the end of the fourth quarter of 2018, Scopia Capital’s equity portfolio had a market value of $2.95 billion, which represents a decrease of 43% from one quarter earlier, when its portfolio was valued around $5.2 billion. During the fourth quarter, the fund added 4 new positions, while also dumping 14 companies. Among its top 10 positions was one in a Dutch semiconductor manufacturer, NXP Semiconductors NV (NASDAQ:NXPI, which is one of the 30 Most Popular Stocks Among Hedge Funds, ). This is a company with a market cap of $27.14 billion that is trading at a price-to-earnings ratio of 13.40. The fund raised its stake in it by 4.37% to 1.76 million shares, attaining a position that was valued on December 31, 2018, at $129.03 million.
On the next page, you can read further about Scopia Capital’s biggest fourth quarter portfolio positions and most important changes.
