Eleven years after its inception, Corsair Capital Management has grown into a half-a-billion dollar hedge fund, best known for sniffing out value-driven investments in public equities. Managed by Jay Petschek and Steven Major, the fund keeps a well-diversified portfolio of names that the average investor may not see on his radar amongst the tech and financial giants. Deep-value and distressed plays are the bread and butter of Corsair, and they keep a close watch on companies in the midst of restructuring, hoping for big growth and big payouts that you can ride as well. Let’s take a look at Corsair’s largest positions as of last September.
Digitalglobe, Inc. (NYSE:DGI) tops the hedge fund’s list of holdings with over $25 million committed. Providing commercial-grade earth imaging products, DGI was a huge winner last year for Corsair, racking up a 68% change in stock price in the last twelve months, compared to a paltry 12% for the S&P500. Forward P/E is trading at a sky-high 23, and with negative earnings per share, we think the upward momentum might be exhausted and a correction is imminent. DGI may be too risky to jump in now, and there are better value plays to be had. Christopher Pucillo of Solus Alternative Asset Management saw a good bump in his performance last year due to the stock, carrying almost 13% of his portfolio in Digitalglobe. (See what the rest of Solus’ portfolio looks like here.)
Next on Corsair’s list is Innophos Holdings, Inc. (NASDAQ:IPHS), a producer of mineral-based ingredients and phosphates used in food, pharmaceutical, and industrial end markets. Nowhere near the stand-out winner that DGI was for the fund in 2012, Corsair rode through the stock’s summer highs and experienced a 13% drop in performance in the third quarter of last year. With trailing and forward P/Es at 14 and 13, respectively, Innophos valuations are more grounded than DGI, and sell-side analysts still expect growth for this year with a price target near $58. (See which billionaire fund manager has a position in IPHS as well.)
What else tops Corsair’s list?