Clark Street Value: “PhenixFin (PFX) is Frustrating to Me, this Company Shouldn’t Exist”

Clark Street Value, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be seen here. An annual portfolio return of 74.99% was recorded by the fund for the year 2021, versus 28.71% for the S&P 500, and an IRR since the inception of 29.12%.  over the same period. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.

Clark Street Value, in its Q4 2021 investor letter, mentioned PhenixFIN Corporation (NASDAQ: PFX) and discussed its stance on the firm. PhenixFIN Corporation is a United States-based capital market company with a $102.4 million market capitalization. The stock closed at $40.70 per share on January 12, 2022.

Here is what Clark Street Value has to say about PhenixFIN Corporation in its Q4 2021 investor letter:

“PhenixFin (PFX) is frustrating to me, this company shouldn’t exist, activists won control of the company last year (then called Medley Capital or MCC) and internalized the BDC.  Since then, they’ve mostly let their legacy investments roll off and invested the proceeds into mREITs.  My original thesis was me speculating that this would be sold to another BDC, that hasn’t happened, in their recent FY22 results press release PFX announced the formation of an “asset-based lending business engaged in the gem and jewelry industry” and highlighted $490MM in net capital loss carryforwards for the first time that I can remember.  Neither is a sign that they’re selling unfortunately, but I might be, this is no longer a strong conviction holding but not expensive at ~70% of book value (essentially unlevered, small net debt position).”

Our calculations show that PhenixFIN Corporation (NASDAQ: PFX) failed to obtain a mark in our list of the 30 Most Popular Stocks Among Hedge Funds. PFX was in 2 hedge fund portfolios at the end of the third quarter of 2021.

You can find other letters from hedge funds and prominent investors on our hedge fund investor letters 2021 Q4 page.

Disclosure: None. This article is originally published at Insider Monkey.