Founded in 2000 with about $4 million in assets, Zimmerman’s Litespeed management held $1.06 billion worth of asset in its portfolio towards the end of 2014. The fund follows an event driven strategy seeking to capitalize on events such as mergers, cash tender offers, leverage buy-outs and restructurings such as bankruptcies, recapitalizations, spinoffs and liquidations. Zimmerman has a strong aversion for risk and therefore her fund uses almost no leverage and hedges her bets in a way so that potential losses do not exceed 1.5% to 2% of the firm’s portfolio value. Zimmerman, a competitive athlete (Litespeed being her preferred bicycle brand) herself, fuels the high energy and curiosity that runs through her fund. As of the fourth quarter the fund held 24 positions, with 32% of the portfolio invested in materials and another 25% in the consumer discretionary sector. Among the fund’s top three holdings were FMC Corp (NYSE:FMC), General Motors Company (NYSE:GM) and American Realty Capital Properties Inc (NASDAQ:ARCP).
While on the outset it may seem that an every day investor’s best chance to maximise his/her returns is to invest in a hedge fund, considering the extensive research that these firms carry out. However, our research has revealed that for the last 5 years an average hedge fund pocketed 4% of the total profits while their clients only got 52%. A strategy to avoid these overbearing fees, could be tracking hedge funds in order to uncover their most profitable picks, which we share through our newsletters. From August 2012 through March, 2015 our small-cap strategy returned 132.0%, while the S&P 500 ETF (SPY) returned only 52.6% during the same period.
With 2.4 million shares valued at $137.35 million, FMC Corp (NYSE:FMC) constituted 12.93% of Litespeed’s equity portfolio. It was Zimmerman’s largest holding at the end of the fourth quarter. Among over 700 hedge funds that we track, Litespeed’s stake in the company was the second largest, with Robert Joseph Caruso’s Select Equity Group being the first as it held some 4.34 million shares valued at $247.77 million. FMC Corp (NYSE:FMC) is a diversified chemical company serving agricultural, consumer and industrial markets globally with innovative solutions, applications and market-leading product.
Although down by about 23% over the last 52 weeks owing to a weak outlook for farm spending, FMC Corp (NYSE:FMC) has a significant upside potential in the future. The recent acquisition of Cheminova and divestiture of their alkali chemicals division has increased the agriculture chemicals business to 75% of sales. This shows the company’s renewed focus on the higher margin chemical businesses rather than the lower margin commodity businesses.