Senvest Master Fund was riding high back in 2021.
The long-bias hedge fund was a top performer, racking up a gain of more than 86 percent, thanks in large part to its fortuitous long position in GameStop, which unexpectedly became a favorite meme stock among the Reddit crowd who conspired a short squeeze that harmed many hedge fund managers.
Since then, however, the fund, headed by Richard Mashaal and Brian Gonick, has struggled to retain this vaunted stature, let alone keep up with the broad market indices. After losing more than 19 percent in the 2022 bear market, Senvest posted gains of roughly 5 and 19.5 percent in 2023 and 2024, respectively, according to a hedge fund database. Now, after the first two months of this year, the fund is off to a rough start, dropping 11.6 percent, per the database.
Longtime Senvest investors, however, are accustomed to the firm’s volatility and may not be concerned. They are mindful that in all but one year — 2023 — since its 1997 inception, the fund has either risen or fallen by double-digit rates, posting triple-digit gains in three different years, according to fund documents obtained by Institutional Investor.
It also has a history of posting dramatic increases coming out of bear markets. II previously reported that Senvest was up 180 percent over the five-month period from November 2020 through March 2021. In 2009, following the financial crisis, Senvest surged 229 percent, and in 2003 it climbed nearly 169 percent following the dot-com bust.
The reason: Senvest is generally an aggressive long-bias fund that usually runs with a gross exposure approaching 200 percent and a net exposure as high as 140 percent. So investors are used to sharp monthly moves that can quickly reverse earlier results.
Senvest declined to comment. According to someone familiar with the fund, it has reduced its net long exposure since the end of the year but is still currently more than 100 percent net long. It mostly runs a long book, and it is not uncommon for foreign-listed stocks to rank among its largest holdings.
In fact, three current top-ten holdings are non–U.S.-listed stocks, says a person familiar with the fund: Canada-based MDA Space, which describes itself as a robotics, satellite systems, and geointelligence pioneer; Paramount Resources, a Canadian energy company; and Athens- and Cyprus-listed Bank of Cyprus. MDA Space is down approximately 4 percent year-to-date, Paramount fell 4 percent before accounting for a 15 Canadian dollar-per-share dividend, and Bank of Cyprus has risen about 26 percent.
Senvest has also been badly hurt this year by its two largest U.S. longs, which combined accounted for roughly 22 percent of U.S.-listed long assets at year-end, per a regulatory filing.
The largest is Tower Semiconductor, responsible for 12.6 percent of the U.S. portfolio at year-end. The hedge fund firm has held a stake in the chip maker since first-quarter 2014. The stock is down more than 26 percent year-to-date. No. 2 U.S. long Wix.com makes up more than 9 percent of the U.S. portfolio since Senvest increased its stake by more than 27 percent in the fourth quarter. It has declined more than 22 percent this year.
UiPath dropped 17 percent-plus this year. The maker of robotic process automation software became the third-largest U.S. long after Senvest boosted its stake by nearly 30 percent in the fourth quarter.
