Sahm Adrangi, 32, went from pondering a journalism career to managing a $300 million hedge fund. He spoke with BuzzFeed about his career transformation, the climate for hedge funds, and some activist investor campaigns currently being waged.
Sahm Adrangi
At age 32, Sahm Adrangi possesses all the traits of a seasoned hedge fund veteran. Sharp suits, check. Hundreds of millions of dollars in investment gains, check. Love of publicity, double check.
Looking at Adrangi now, it's hard to fathom that at one point he coveted a career in journalism, and even got a job offer from The Wall Street Journal. In retrospect, the visa issues that prevented the Canadian-born Adrangi from accepting the WSJ's offer may have been the best thing to ever happen to him.
The Yale alum now leads New York–based Kerrisdale Capital, a $300 million hedge fund birthed in 2009 largely from prescient short bets against Chinese companies he believed had shady business tactics that went unnoticed by the country's weak financial regulatory system.
Adrangi spoke with BuzzFeed about his hedge fund beginnings, the outlook for the industry, and some activist investor campaigns currently being waged.
I got an internship at The Wall Street Journal, but I'm Canadian and had visa issues. They gave me an offer and it was just that I needed a card that hadn't come in yet, and they didn't want to deal with the immigration around it. I wanted to be a journalist — I had a summer position at the The Globe and Mail and it didn't get extended to full-time work, so it was time to cash in that chip and go into finance.
I went into investment banking at Deutsche Bank, and I had another offer from Credit Suisse. When you're an analyst, you usually go to private equity or a hedge fund after a couple years of investment banking, or maybe b-school. I always wanted to go onto the hedge fund side of things, so I went to Long Acre, a relatively traditional hedge fund with great guys, well-known within the distressed assets community.
Taking research and publishing it, that trend is going to grow. You [recently] saw Citron Research release their report, and I think the trend of buy-side firms publishing research on the short side is going to grow. It's a good way of generating returns to the extent that certain stocks are mispriced, and firms are using the credibility they've built to correct those valuations as an investment strategy.
You've also seen a big discrepancy between developed market valuations and emerging market valuations, with the former up and the latter down. As interest rates are set to increase, money is moving into developed markets, usually it's the opposite.
Regarding activist investing, in terms of the U.S., it will probably continue to accelerate. I don't know if it will really change in any fundamental way, just more activist firms and dedicated hedge funds will participate.
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