HG Vora Capital is an activist hedge fund that was founded back in 2009 by Parag Vora who cut his teeth at Silver Point Capital L.P as a senior investment professional, and at Goldman Sachs’ Real Estate Investment Banking Division as a vice president. When he worked at Silver Point Capital L.P. his prime focus was investing across the capital structure of both private and public firms, but with the biggest attention on distressed situations and credit. While working at Goldman Sachs’ Real Estate Investment Banking Division, Parag Vora was in charge of consulting real estate and consumer-oriented companies in the matter of acquisitions, mergers and leveraged finance transactions. Parag Vora earned his Juris Doctor cum laude and Master of Business Administration from New York University, and also holds a Bachelor of Arts degree with Distinction in Honors Economics and Spanish from the University of Michigan. Together with Gary Moross a partner at HG Vora Capital, Parag Vora, the fund’s portfolio manager, bring more than 35 years of combined investing experience.
That knowledge resulted in the fund having around $4 billion in assets under management and bringing 14% annualized return since its inception (as of August 2018). HG Vora Capital usually invests in actively traded debt and equity instruments on a long and short basis, seeking for businesses that are in the process of some kind of strategic change or with near term operational challenges. Main areas HG Vora Capital likes to invest in include gaming, real estate, travel, leisure, retail and consumer, and lodging. The fund seeks for mispriced securities.
HG Vora Capital’s 14% annualized return is nothing to sneeze at but our flagship strategy generated an annualized return of 20.5% since its inception. Insider Monkey’s flagship strategy identifies the best performing 100 hedge funds at the end of each quarter and invests in their consensus stock picks. This way it is always invested in the best ideas of the best performing hedge funds and is able to generate much higher returns than the market. Since its inception in May 2014, our flagship strategy generated a cumulative return of 121% vs. a cumulative gain of 66.6% for the S&P 500 ETF (SPY) (see the details here). Last quarter HG Vora was ranked #31 in our hedge fund rankings, so we took into account its holdings when we came up with our new “buy list”.
According to the HG Vora Capital’s last 13F filing for the second quarter 2018, the fund made several changes to its portfolio, with several new additions, out of which is maybe the most interesting is the acquisition of 3 million shares of Caesars Entertainment Corp (CZR) worth around $32 million. Just a couple of days ago, HG Vora Capital went activist on the company, after building its stake to 4.9%, asking it to explore options that could include a total sale of the company, according to Reuters. Caesars Entertainment Corp seems to be very popular among the investors Insider Monkey tracks, as 58 of them collectively own 58.40% of the company, with Canyon Capital Advisors having the largest stake worth around $725.9 million.
Other new companies in HG Vora Capital’s portfolio include MGM Resorts International (MGM), Horton D R Inc (DHI), and Carnival Corp (CCL). The biggest new investment was in a global hospitality company, MGM Resorts International (MGM), with the fund buying 5.2 million shares, worth around $151 million. Among the hedge funds from Insider Monkey’s database there was 51 investor bullish on this stock at the end of the second quarter 2018, which is down by 4 from the previous quarter. Collectively those investors hold 16.30% of the company’s outstanding shares. HG Vora Capital’s largest old investment is still in LaSalle Hotel Properties (LHO) with the fund raising its stake by 25% and currently owning $342.3 million worth of LaSalle Hotel Properties’ shares. This stock has seen a noticeable increase in the number of bullish investors from our database, with 35 currently owning shares, compared to only 10 in the previous quarter.
Some of the companies HG Vora Capital said goodbye to in the second quarter include Ddr Corp (DDR), Spirit Realty Capital Inc. (SRC), Penn National Gaming Inc (PENN), and Forest City Realty Trust Inc. (FCEA) to name a few. The largest stake HG Vora Capital decided to sell was in Ddr Corp (DDR) worth around $91.6 million counting 12.5 million shares. Also, the fund significantly lowered its stake in Gaming and Leisure Properties, Inc. (GLPI), now owning $12.5 million worth of shares, while previously it held shares worth of around $70.3 million.
