Alluvial Capital Management, an investment management firm, published its second-quarter 2021 investor letter – a copy of which can be downloaded here. A return of 7.0% was delivered by the fund for the Q2 of 2021. Returns for the quarter, year-to-date, and since inception periods comfortably exceed all relevant benchmarks. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
In the Q2 2021 investor letter of Alluvial Capital Management, the fund mentioned P10 Holdings, Inc. (NYSE: PIOE) and discussed its stance on the firm. P10 Holdings, Inc. is a Dallas, Texas-based capital market company with an $807.5 million market capitalization. PIOE delivered a 35.08% return since the beginning of the year, while its 12-month returns are up by 133.38%. The stock closed at $8.26 per share on September 10, 2021.
Here is what Alluvial Capital Management has to say about P10 Holdings, Inc. in its Q2 2021 investor letter:
“P10 Holdings remains our largest position, though I reduced our holdings this quarter to manage our exposure and to build cash for other opportunities. It has been a quiet year for P10 compared to the fireworks of 2020, but the company continues working to build a diversified alternative investments manager. I was pleased to attend the company’s shareholder meeting in Dallas in June. P10 is focused on completing additional acquisitions, though it will be extremely selective. Up-listing to a major exchange remains a priority, though the company will not allow the process to distract from the acquisition hunt, as acquisitions will provide shareholders with much more value in the long run. The company projects fee-paying assets under management of $16 billion by year-end, which should provide around 45 cents per share in free cash flow. Shares remain very attractively priced and will move on any acquisition or up-listing announcement.”
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Based on our calculations, P10 Holdings, Inc. (NYSE: PIOE) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. P10 Holdings, Inc. (NYSE: PIOE) delivered a 20.47% return in the past 3 months.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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Disclosure: None. This article is originally published at Insider Monkey.
