| Anthony Chiasson, Aurmedis Global Investors (Peter Foley/Bloomberg) |
Anthony Chiasson is having a rough time revitalizing his hedge fund career.
The one-time co-founder of Level Global Investors and former SAC Capital Advisors portfolio manager is barely in the black after nearly a year and a half running his new firm, Aurmedis Global Investors, and is having trouble raising money.
The firm’s Aurmedis Global Master Fund, launched in November 2016, is up just 1.9 percent since its inception, according to a letter to investors obtained by Alpha. It lost 0.24 percent in the first quarter of this year, outperforming the broad market averages. It gained just 4.9 percent in 2017, way underperforming the market indexes.
As of January 1, 2018, the firm was managing just $56 million in regulatory assets, according to a regulatory filing.
Aurmedis is one of a growing number of firms headed by former SAC portfolio managers that are failing to generate consistently strong returns. No one from the firm returned a phone call seeking comment.
In its June 2017 letter to clients, Aurmedis seemed hopeful, asserting, “We are experiencing healthy traction as we continue to engage with the allocator community.”
The small sum of money under management must be frustrating for Chiasson, who was managing between $4 billion and $5 billion at Level Global.
In case you forgot, the Feds raided his offices at Level Global as part of its insider trading investigation. In December 2012 Chiasson was convicted of one count of conspiracy to commit securities fraud and five counts of securities fraud. In May 2013 he was sentenced to six-and-a-half years in prison, while former Diamondback Capital Management portfolio manager Todd Newman was sentenced to 54 months in prison.
However, in December 2014, a federal appeals court vacated their convictions, ruling, in effect, that the jury was given improper instructions. The court asserted that Chiasson and Newman were unaware of the sources of the insider trading information and that it was not apparent that these sources revealed the sensitive information for personal gain.
In his first-quarter report, dated March 2018 and obtained by Alpha, Chiasson provided interesting insight into his current strategy. He runs a diversified book of 36 longs and 34 short positions. The fund has an average net exposure of 21.6 percent and an average gross exposure of about 150 percent. In June its gross exposure was closer to 121 percent.
“The higher level of volatility has expanded dispersion between winners and losers and should create more opportunity for our low net exposure investment discipline,” Aurmedis stated in the letter. “During March (and during the February/March risk-off period), our approach of specialized research blended with active risk management successfully protected capital.”
Looking ahead, technology accounts for the bulk of the firm’s net long exposure among five groups, including one called “other.” It also has a small net long exposure to consumer stocks.
Its five largest long positions are discount retailer Dollar Tree, software company Splunk, software and cloud giant Microsoft, cloud computing specialist Salesforce.com, and movie theatre chain Cinemark Holdings.
In the letter, Aurmedis highlighted one stock it is shorting. It said at the beginning of the year it increased its conviction in its short position in Check Point Software Technologies, a network firewall company. The hedge fund asserted that the company is facing secular and increasingly competitive headwinds “that [are] creating serious challenges to its historically strong market position.”
