Sahm Adrangi’s negative report on The St. Joe Company

Sahm Adrangi has published a negative report explaining his short position in The St. Joe Company real estate project. The St. Joe Company is a real estate company that promised investors to transform a vast area near Panama beach into a tourist destination. The company has given a description of an attractive establishment that will attract retirees and lucrative businesses. However, the investment guru, Sahm Adrangi thinks otherwise.

According to his research, the St. Joe Company will not be able to build houses that justify their 1 billion dollar valuation. The land they plan to build on is far from the beach and located in a swampy area. The actual land scape is a direct contrast of the beach described in the company’s pitch.

The sellside assumes that approximately 2700 home sites and 400k square feet are sold every year. This paints a picture of St. Joe Company properties one of the top selling properties in the country. However, in reality there is minimal development going on on the ground. Building department inquiries are close to none and permit fillings are almost non-existent.

In his report, Sahm Adrangi said that long term investors who have waited for long to reap the benefits of their investment should prepare to wait longer for that to happen. As at now, he speculates that the company’s share are worth 40% less than what they were. This decrease in share value is also catalysed by the SEC limitations which make it difficult to liquefy equity holdings.

Sahm Adrangi is the founder and president of Kerrisdale Capital Management, LLC. Kerrisdale is an investment company that focuses on fundamentally oriented investments. Their aim is to help their clients benefit from their investments in the long term. In line with their mission, they also specialize on event driven situations.

Before founding Kerrisdale, Sahm Adrangi worked as an investment analyst with Longacre Fund Management. He had an opportunity to analyse investments worth over 1.2 billion. He analysed and researched both credit funds and equity funds. This helped him sharpen his strength in analysing investments.

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Highland Capital New Fund to Spur the Healthcare Sector

The Dallas based investment management firm Highland Capital Management (HCM) has set its sights firmly on healthcare with a huge investment commitment. According to a news report that appeared on Deal Street Asia on May 14, 2017, Highland Capital through its Asian affiliate Highland Capital Management Korea Ltd has committed a $147 million to a healthcare focused private equity fund. The anchor investor in the deal is the National Pension Service (NPS) of South Korea. The Korean pension fund was established in 1988 and is valued at about $500 billion. The Sovereign Wealth Fund Institute corpus for NPS stands at $465 billion. Besides the anticipated high returns, the investors drawn into the deal are primarily healthcare sector oriented.

 

The fund will be co-managed by a Korean equity fund and venture capital firm, Stonebridge Capital. The firm has a working agreement with Highland Capital. The much awaited unveiling has finally set in motion, Highland Capital Management’s first healthcare oriented private equity fund in the Asian continent. The fund is expected to boost Asia investor participation away from the traditional direct basis and multi-purpose funds. The North American middle market healthcare companies are also targeted by the fund. Speaking after closing the deal, the MD and Co-Principle of Highland private equity group, Mr. Carl Moore said health care is Highland’s single largest industry exposure. A report released by Highland on May 2017 indicates that the firm has over $1.5 billion in healthcare assets under management (AUM).

 

The assets span various fund structures and asset classes. With regards to aggregation, Highland Capital boasts $15 billion AUM targeted at a number of credit strategies, including credit hedge funds, distressed, collateralized loan obligations (CLO’s), special situation private equity and long only funds and separate accounts. According to Globenewswire, HCM was established in 1993 by James Dondero and Mark Okada. Today, the firm’s has close to $20 billion in AUM. The clients that regularly do business with Highland include financial institutions, endowments, public pension plans, High net worth persons, governments, fund of funds and foundations. The SEC registered investment advisor maintains a global presence with offices in 4 countries.