A co-founder of Eton Park Capital Management who enjoyed a celebrated fund-raising when he launched his own fund several years ago finally posted his first strong gain last year.
Anand Desai’s Darsana Capital Partners’ main hedge fund, Darsana Fund, returned more than 20 percent in 2017, according to an investor. This is a relief for many of the investors who ponied up more than $1 billion back in 2014. In 2016 the fund was said to be flat to down a bit. It finished 2015 down 0.40 percent after surging 10 percent in the fourth quarter, according to another investor.
In its inaugural year 2014, Darsana gained 6.8 percent. The firm declined to comment.
Desai created a buzz when he raised about $1 billion early in 2014. By the end of that year he had already amassed $2.5 billion.
Investors were excited because Desai was previously a senior managing director and founding partner of Eton Park, the multistrategy firm founded by former Goldman Sachs partner Eric Mindich. Desai was at Eton Park from 2004 through 2013, where he was a member of the operating committee and was in charge of fundamental long-short equity and structured credit investing. Mindich closed his firm last year.
Darsana is known for making concentrated bets on a small number of individual stocks. It tells clients it seeks companies and industries it deems are undergoing significant secular change where Darsana “has a differentiated view of the outcome.”
At the end of the third quarter, it held just 16 individual common stocks in its roughly $2.3 billion U.S. stock portfolio. (Fourth-quarter holdings must be disclosed by late next week).
Its largest positions enjoyed very strong gains last year. Interestingly, several of them are up so far this year or only down slightly.
Spirit Aerosystems Holdings was by far its largest stake, fetching around 18 percent of the assets. Darsana has held the stock since the fourth quarter of 2014. Last year the shares of the maker of large commercial aircraft structures surged more than 50 percent.
The stock is roughly flat so far this year after surging another 17 percent or so before the current stock selloff.
Alphabet’s Class C shares were the second-largest long, accounting for a little less than 10 percent of equity assets at the end of the third quarter. They were Darsana’s fifth-largest individual long at the end of the first quarter, when the hedge fund firm held a sizable position in Google call options as well. However, the firm liquidated its Google stake in the second quarter before re-establishing its sizable position in the September three-month period.
In any case, shares of Google surged about 35 percent last year. Google is down only 1.2 percent this year but is off about 12 percent from its 2018 high.
Banking giant Bank of America, Darsana’s second- or third-largest long all last year depending upon the period of time, was up about 34 percent for the year. The stock is up nearly 4 percent this year.
Autodesk, its fourth-largest long, was up 40 percent last year. The maker of 3-D design software is up about 2.5 percent for the year.
Children’s clothing company Carters jumped 36 percent last year. The stock is up less than 1 percent this year.
The New York Times, Darsana’s sixth-largest long, surged 39 percent last year. This year it is up another 33 percent, including more than 11 percent on Thursday, after the media giant reported that subscription revenue now exceeds $1 billion and accounts for 60 percent of total revenue of $1.7 billion.
