According to recent 13G filings with the Securities and Exchange Commission, Dmitry Balyasny’s hedge fund Balyasny Asset Management and Jason Karp’s Tourbillon Capital Partners have acquired equity stakes in the newly-minted public company, Green Plains Partners LP (NASDAQ:GPP). Balyasny Asset Management disclosed owning 1 million shares, which represent 6.29% of the company’s outstanding common stock. Tourbillon Capital Partners’ stake contains 2.36 million shares, equal to 14.9% of Green Plains Partners common stock.
In the eyes of most traders, hedge funds are assumed to be underperforming, old investment tools of the past. While there are more than 8000 funds in operation at present, Hedge fund experts at Insider Monkey look at the aristocrats of this group, around 700 funds. Contrary to popular belief, Insider Monkey’s research revealed that hedge funds underperformed in recent years because of their short positions as well as the huge fees that they charge, but they managed to outperform the market on the long side of their portfolios. In fact, the 15 most popular small-cap stocks among hedge funds returned 135% since the end of August 2012 and beat the S&P 500 Index by some 80 percentage points (see more details here).
To start off, let’s briefly introduce the two hedge fund firms mentioned above. Balyasny Asset Management is a Chicago-based firm founded in 2001 by Dmitry Balyasny with a team of 12 people. The hedge fund firm has expanded well beyond its original location and size, currently overseeing five main offices in three countries with over 200 professionals. Although Balyasny Asset Management’s strategy primarily focuses on long-short equity investing, the hedge fund uses a multitude of tactics across asset classes. The algorithmic probability concepts and fundamental macro indicators are allegedly dominating Dmitry Balyasny’s investment decision-making process, which clearly indicates that his stock picks are not random at all. As stated by its recent 13F filing, Balyasny Asset Management currently an equity portfolio worth $12.38 billion.
Tourbillon Capital Partners is global long-short equity firm founded by its current Chief Investment Officer and CEO, Jason Karp, in January 2013. Jason Karp had worked as a generalist portfolio manager and director of research at Steve Cohen’s SAC Capital Advisor’s CR Intrinsic unit and as co-chief investment officer at Clint Carlson’s Carlson Capital prior to launching his own firm. Even though Tourbillon Capital Partners is considered a global hedge fund, it tends to focus primarily on existing investment opportunities on the North American continent. At the same time, the investment management firm’s investment strategy strongly relies on thorough fundamental research, which turned out to be quite successful so far. Tourbillon’s flagship fund generated a return of 21% in 2013 and 10.05% in 2014. Remarkably, these gains have been generated while maintaining an average net exposure of only 18%. Tourbillon Capital Partners manages an equity portfolio with a value of $3.88 billion, which is an impressive figure, considering it started with only $250 million in 2013.