Massif Capital, an investment management firm, published its fourth-quarter 2021 investor letter – a copy of which can be downloaded here. The core portfolio for Massif Capital was up 7.2% net of fees during the fourth quarter of 2021. Year-to-date, the portfolio returned 23% net of fees. Spare some time to check the fund’s top 5 holdings to have a clue about their top bets for 2022.
Massif Capital, in its Q4 2021 investor letter, mentioned Global Ship Lease, Inc. (NYSE: GSL) and discussed its stance on the firm. Global Ship Lease, Inc. is a London, United Kingdom-based container shipping company with an $831.5 million market capitalization. GSL delivered a 0.22% return since the beginning of the year, while its 12-month returns are up by 77.85%. The stock closed at $22.96 per share on January 21, 2022.
Here is what Massif Capital has to say about Global Ship Lease, Inc. in its Q4 2021 investor letter:
“We initiated a 6% position in GSL, bringing total maritime transit exposure up to ~9% of the portfolio when combined with our 3% SBLK position. GSL is a containership owner, leasing ships to container companies (such as a Maersk) at fixed rates. As owners, they own and manage the vessels (responsible for crews, maintenance, insurance) but do not have fuel costs. GSL focuses on mid-size to smaller containerships, which serve the faster-growing inter-regional trade routes that represent ~70% of global containerized trade volume.
As they own its containers, their business is both pro-cyclical (chartered tonnages used as growth platform by liner shipping companies) and counter-cyclical (with the sale and lease-back structures used by liner companies as a balance sheet management tool). GSL has a track record that includes both organic acquisitions and a strategic combination in Q4 2018 that doubled the size of the fleet.
We like GSL because they do not have as much operational leverage as a company like ZIM (which leases on both sides of the trade), and they sign 2–5-year contracts. Liners have been eager to secure that capacity for extended durations spanning multiple years, significantly longer than has been the case historically and well-aligned with GSL’s strategic preference to lock in value over time and provide forward visibility on cash flows…” (Click here to see the full text)
Our calculations show that Global Ship Lease, Inc. (NYSE: GSL) failed to obtain a mark on our list of the 30 Most Popular Stocks Among Hedge Funds. GSL was in 14 hedge fund portfolios at the end of the third quarter of 2021, compared to 18 funds in the previous quarter. Global Ship Lease, Inc. (NYSE: GSL) delivered a -3.65% return in the past 3 months.
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.
