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KG Funds Management’s Return, AUM, and Holdings

KG Funds Management is an event-driven hedge fund established in December 2008, with its headquarters in New York. The fund was co-founded by Ike Kier, the current CEO, and Ilya Zaides, its present CIO and Portfolio Manager. Ilya Zaides holds a bachelor’s degree in Economics from Berkeley University of California, and J.D. from New York […] Read More...

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="KG Funds Management is an event-driven hedge fund established in December 2008, with its headquarters in New York. The fund was co-founded by Ike Kier, the current CEO, and Ilya Zaides, its present CIO and Portfolio Manager. Ilya Zaides holds a bachelor’s degree in Economics from Berkeley University of California, and J.D. from New York University. He started his career dealing with corporate transactions and financial products at Milbank, Tweed, Hadley &amp; McCloy and King &amp; Spalding. Prior to co-founding KG Funds Management, he held positions of an analyst at Ivy Asset Management and Senior Vice President and Head of Hedge Fund Research in Auda Asset Management.” data-reactid=”11″>KG Funds Management is an event-driven hedge fund established in December 2008, with its headquarters in New York. The fund was co-founded by Ike Kier, the current CEO, and Ilya Zaides, its present CIO and Portfolio Manager. Ilya Zaides holds a bachelor’s degree in Economics from Berkeley University of California, and J.D. from New York University. He started his career dealing with corporate transactions and financial products at Milbank, Tweed, Hadley & McCloy and King & Spalding. Prior to co-founding KG Funds Management, he held positions of an analyst at Ivy Asset Management and Senior Vice President and Head of Hedge Fund Research in Auda Asset Management.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The idea of the fund’s founders was to outperform the S&amp;P 500, much like of many other investors out there. And even though KG Funds Management was founded during the heavy financial crisis, its investment philosophy proved to work pretty well within such an environment. The fund started off with Ike Kier’s own money, and they explored warrants from the TARP.&nbsp; Before considering a company to invest in, the fund monitors around 100 companies for several years to identify the “events” which could make the stock undervalued or misunderstood by the market. In this way, the fund focuses on companies with high-quality businesses and assets. The companies the fund is interested in are those that are able to compound annual returns at 20% minimum, within a period time of three to five years. At the end of 2016, it held $220.3 million in regulatory assets under management on a discretionary basis.” data-reactid=”12″>The idea of the fund’s founders was to outperform the S&P 500, much like of many other investors out there. And even though KG Funds Management was founded during the heavy financial crisis, its investment philosophy proved to work pretty well within such an environment. The fund started off with Ike Kier’s own money, and they explored warrants from the TARP.  Before considering a company to invest in, the fund monitors around 100 companies for several years to identify the “events” which could make the stock undervalued or misunderstood by the market. In this way, the fund focuses on companies with high-quality businesses and assets. The companies the fund is interested in are those that are able to compound annual returns at 20% minimum, within a period time of three to five years. At the end of 2016, it held $220.3 million in regulatory assets under management on a discretionary basis.

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When it comes to returns, KG Funds Management has shown a positive performance during the last several years. For instance, its KG Investments Fund brought back an impressive 26.85% in 2013, followed by a decrease in 2014, with a return of 8.98%. During the next period KG Investments Fund progressed returning 12.43% in 2015 and 10.82% in 2016. The following year it generated a return of fantastic 30.73%, which was the highest annual return over the past several years. In 2018, through October, KG Investments Fund returned 14.28%. Its total annual return amounted to 426.02%, with a compound annual return of 18.56%, and the worst drawdown was 20.30.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Insider Monkey’s mission is to identify promising (and also terrible) hedge fund stock pitches and share them with our subscribers. We launched a long activist investing strategy in our monthly newsletter 2 years ago. This strategy’s stock picks returned 61% in 2 short years, vs. a gain of 21% for the S&amp;P 500 Index ETF (SPY). Last October we shared one of our stock picks, Ascendis Pharmaceuticals (ASND), in a free sample issue of our monthly newsletter (you can still&nbsp;download it free of charge). The stock doubled in less than 5 months.” data-reactid=”26″>Insider Monkey’s mission is to identify promising (and also terrible) hedge fund stock pitches and share them with our subscribers. We launched a long activist investing strategy in our monthly newsletter 2 years ago. This strategy’s stock picks returned 61% in 2 short years, vs. a gain of 21% for the S&P 500 Index ETF (SPY). Last October we shared one of our stock picks, Ascendis Pharmaceuticals (ASND), in a free sample issue of our monthly newsletter (you can still download it free of charge). The stock doubled in less than 5 months.

We have also been very successful at identifying stocks that will decline even in a bull market. We launched our short strategy a little more than 2 years ago and share our short stock picks in our quarterly newsletter. This strategy’s picks lost 30.9% since then, vs. a gain of 24% for the S&P 500 Index. This means our short strategy actually outperformed the market by nearly 55 percentage points (let us know if you don’t understand how the outperformance for a short strategy is calculated).

Recently our monthly newsletter identified another undervalued stock that is expected to increase its earnings by more than 10% annually and trades at only 10 times its 2019 earnings. We expect this stock to return 60% in the next 12-24 months. We take a closer look at hedge funds like KG Funds Management in order to identify their best and worst ideas.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="At the end of the first quarter of 2019, KG Fund Management’s equity portfolio carried a value of $503.43 million, which is about 4.77% higher compared to the last quarter of 2018 when it was worth $480.52 million. In the first quarter of 2019 KG Fund Management held a total of eight positions. There weren’t any new additions to the fund’s portfolio, and only one position was sold – Autozone Inc (NYSE:AZO). The fund said goodbye to 23,000 Autozone’s shares, which carried a value of $19.28 million. During the quarter, the fund lowered its stake in Alphabet Inc. (NASDAQ:GOOG) by 1% to 48,007 shares worth $56.33 million. Alphabet Inc. is at the fifth place of the&nbsp;30 Most Popular Stocks Among Hedge Funds in Q1 of 2019.” data-reactid=”33″>At the end of the first quarter of 2019, KG Fund Management’s equity portfolio carried a value of $503.43 million, which is about 4.77% higher compared to the last quarter of 2018 when it was worth $480.52 million. In the first quarter of 2019 KG Fund Management held a total of eight positions. There weren’t any new additions to the fund’s portfolio, and only one position was sold – Autozone Inc (NYSE:AZO). The fund said goodbye to 23,000 Autozone’s shares, which carried a value of $19.28 million. During the quarter, the fund lowered its stake in Alphabet Inc. (NASDAQ:GOOG) by 1% to 48,007 shares worth $56.33 million. Alphabet Inc. is at the fifth place of the 30 Most Popular Stocks Among Hedge Funds in Q1 of 2019.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The fund has also lowered its stake in Athene Holding Ltd. (NYSE:ATH) by 17%, or 390,170 shares. Nevertheless, Athene Holding Ltd. was at the third position among the top KG Fund Management’s positions in Q1 2019, with 1.83 million shares worth $74.79 million, comprising 14.85% of the fund’s portfolio. Athene Holding Ltd. is an insurance company that primarily deals with retirement savings and issuing and reinsuring fixed annuities. It is a privately owned company based in Pembroke. The company’s market cap is $8.03 billion. Year-to-date, the company’s stock gained 3.13%, and on June 25th it had a closing price of $41.80.” data-reactid=”34″>The fund has also lowered its stake in Athene Holding Ltd. (NYSE:ATH) by 17%, or 390,170 shares. Nevertheless, Athene Holding Ltd. was at the third position among the top KG Fund Management’s positions in Q1 2019, with 1.83 million shares worth $74.79 million, comprising 14.85% of the fund’s portfolio. Athene Holding Ltd. is an insurance company that primarily deals with retirement savings and issuing and reinsuring fixed annuities. It is a privately owned company based in Pembroke. The company’s market cap is $8.03 billion. Year-to-date, the company’s stock gained 3.13%, and on June 25th it had a closing price of $41.80.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="On the other side, the fund decided to increase its stake in Cbs Corp (NYSE:CBS) by 14%, or 86,788 shares. At the end of Q1, the fund held 684,965 of the company’s shares worth $32.56 million, comprising 6.46% of the fund’s portfolio. Cbs Corp is a New York-based mass media corporation. It is focused on television production, distributing various contents via many platforms. Cbs Corp is among the most watched television networks in the US. According to the company’s report for the Q1 2019, the revenues have increased by 11% compared to the same period last year, reaching $4.17 billion. The company also reported adjusted diluted earnings per share of $1.37, which is 2% higher compared to the Q1 2018. Cbs Corp has a market cap of $18.54 billion. Since the beginning of the year, the company’s stock has gained9.33%, having the closing price of $49.92 on June 25th.” data-reactid=”35″>On the other side, the fund decided to increase its stake in Cbs Corp (NYSE:CBS) by 14%, or 86,788 shares. At the end of Q1, the fund held 684,965 of the company’s shares worth $32.56 million, comprising 6.46% of the fund’s portfolio. Cbs Corp is a New York-based mass media corporation. It is focused on television production, distributing various contents via many platforms. Cbs Corp is among the most watched television networks in the US. According to the company’s report for the Q1 2019, the revenues have increased by 11% compared to the same period last year, reaching $4.17 billion. The company also reported adjusted diluted earnings per share of $1.37, which is 2% higher compared to the Q1 2018. Cbs Corp has a market cap of $18.54 billion. Since the beginning of the year, the company’s stock has gained9.33%, having the closing price of $49.92 on June 25th.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Click here&nbsp;to read the rest of the article, where we discuss the rest of KG Funds Management’s positions at the end of Q1 2019.” data-reactid=”36″>Click here to read the rest of the article, where we discuss the rest of KG Funds Management’s positions at the end of Q1 2019.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Disclosure:&nbsp;None.” data-reactid=”37″>Disclosure: None.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="This article was originally published at&nbsp;Insider Monkey.” data-reactid=”38″>This article was originally published at Insider Monkey.

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