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Arnaud Ajdler’s Engine Capital Management’s Returns, AUM, and Holdings

Arnaud Ajdler’s Engine Capital Management is a value-oriented special situations fund based in New York City. It’s a relatively young hedge fund, founded in 2013, and it provides its services to pooled investment vehicles. Currently, Arnaud Ajdler serves as the firm’s Managing Member. In the years before Engine Capital Management, he has accumulated significant experience serving portfolio companies on strategic and operational leads. He has worked as a management consultant for Boston Consulting Group, Mercer Management Consulting, and Deutsche Bank, and as a director and on the compensation committee of Stewart Information Services. Moreover, Mr. Ajdler was the Chief Financial Officer, director and Secretary of Arpeggio Acquisition Corporation and Managing Director at Crescendo Advisors II LLC. Nowadays, he is also an Adjunct Professor at Columbia Business School where he teaches a course in Value Investing. He holds a B.S. in Mechanical Engineering from the Free University of Brussels, Belgium, an S.M. in Aeronautics from the Massachusetts Institute of Technology and an MBA from Harvard Business School.

Arnaud Ajdler Engine Capital

Arnaud Ajdler Engine Capital

Engine Capital Management mainly invests in small to mid-cap companies in the public equity markets of the United States and Canada. This value-oriented special situations fund focuses primarily on activism. It employs a fundamental, bottom-up long research looking for stable businesses with free cash flows and undemanding valuations in which exists a plan to correct the value gap.

The firm manages four private funds and aims to achieve substantial returns through the application of its strategy. For instance, the performance of its fund Engine Capital fund has had only one down year since its inception in 2013. Its first year, the fund achieved a return of 15%, followed by 2.8% in 2014. It was in 2015 when the fund lost 7.78%. However, it recovered during 2016 and 2017, returning 31.46% and 15.06% respectively. In 2018, as of October 29th (YTD), the fund’s return was calculated at 2.50 %. Engine Capital Fund’s total return amounted 67.86% with a compound annual return of 10.37%. Its worst drawdown was at 13.24.

Insider Monkey’s mission is to identify promising (and also terrible) hedge fund stock pitches and share them with our subscribers. We launched a long activist investing strategy in our monthly newsletter 2 years ago. This strategy’s stock picks returned 61% in 2 short years, vs. a gain of 21% for the S&P 500 Index ETF (SPY). Last October we shared one of our stock picks, Ascendis Pharmaceuticals (ASND), in a free sample issue of our monthly newsletter (you can still download it free of charge). The stock doubled in less than 5 months.

We have also been very successful at identifying stocks that will decline even in a bull market. We launched our short strategy a little more than 2 years ago and share our short stock picks in our quarterly newsletter. This strategy’s picks lost 27.5% since then, vs. a gain of 25% for the S&P 500 Index. This means our short strategy actually outperformed the market by 52.5 percentage points (let us know if you don’t understand how the outperformance for a short strategy is calculated).

Last week our monthly newsletter identified another undervalued stock that is expected to increase its earnings by more than 10% annually and trades at only 10 times its 2019 earnings. We expect this stock to return 60% in the next 12-24 months. Email us if you are interested in this stock or subscribe here. We take a closer look at hedge funds like Engine Capital in order to identify their best and worst ideas.

According to the firm’s Plain Brochure from September 19th, 2018, it holds approximately $266.65 million in assets under management on a discretionary basis. At the end of the fourth quarter of 2018, Engine Capital Management disclosed a 13F equity portfolio valued at $170.25 million, which counted forty-eight positions, after adding nine and bumping ten. Even though the fund’s holdings are diverse, none of them were among the 30 Most Popular Stocks Among Hedge Funds. Nevertheless, there were some exciting changes made this Q4 of 2018. Keep reading on the following page to find out more about that.

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