Joseph Jolson’s Harvest Capital Strategies’ Return, AUM, and Holdings

Harvest Capital Strategies is a San Francisco-based hedge fund that mainly focuses on private equity and venture capital, middle-market lending and on equity hedge funds. It was founded back in 1999, and it operates as a subsidiary of JMP Group Inc. Joseph Jolson, the fund’s CEO, co-founded JMP Group and is its CEO and the Chairman of its board of Directors, as well. He was a portfolio manager of the fund’s strategy Harvest Opportunity Partners II for 16 years (from 1999, through 2015). Prior to launching JMP Group, Joseph Jolson worked at Montgomery Securities as Senior Managing Director and Senior Equity Research Analyst. Over the course of his long career, he was also employed at Fidelity Management and Research, and Donaldson Lufkin & Jenrette, and he received many recognition for his professional work. He was named to Institutional Investor magazine’s All-America Research Team for 10 consecutive years and was also chosen as an All-Star Analyst by The Wall Street Journal. Joseph Jolson earned his BA from Yale University and an MBA with distinction from the Wharton School at the University of Pennsylvania.

The fund’s investment strategy is built upon the idea that a combination of detailed, professional research and wise usage of substantial connections is the best way for the fund to attain competitive advantage. Harvest Capital Strategies sometimes invest in special situations as well, while mainly picking companies from the financial services, agricultural, and technology sectors. At the end of 2016, the fund held around $1.5 billion in assets under management on a discretionary basis. Among Harvest Capital Strategies’ investors are high-net-worth individuals, family offices, and institutions. The fund seeks to attain high profits regardless of the market conditions, by relying on due diligence and meticulous analysis. Let’s see what has this strategy brought in terms of performance.

Joseph Jolson's Harvest Capital Strategies’ Return, AUM, and Holdings

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Its Harvest Small Cap Partners delivered 14.20% in 2013, followed by a fantastic 30.83% in 2014, and a solid 6.18% in 2015. In 2016, it brought back 10.60%, and the next year it lost 8.18%. Last year through October it generated a return of 7.34%. Its total return was of 350.86%, for a compound annual return of 12.54%. Harvest Small Cap Partners’ worst drawdown was 10.27.

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On December 31st, 2018, Harvest Capital Strategies’ equity portfolio counted around 45 long positions and it was valued around $358.31 million. This represented a decrease of 59.07% from one quarter earlier when its portfolio was valued at $875.50 million. During the fourth quarter of 2018, the fund dumped 14 positions, while also acquiring 7 new. Among its top five positions was Citigroup Inc (NYSE:C), one of the 30 Most Popular Stocks Among Hedge Funds in Q4 of 2018. Citigroup is an NYC-based financial services corporation and multinational investment bank, with a market cap of $152.58 billion. It is trading at a price-to-earnings ratio of 9.67, and year-to-date, its stock gained 20.11%, having a closing price of $64.30 on March 20th.  In its last financial report for the fourth quarter of 2018, Citigroup disclosed net income of 4.3 billion and diluted EPS of $1.64 on revenue of $17.1 billion. This compares to a net loss of $18.9 billion or $7.38 per diluted share, on revenues of $17.5 billion in the corresponding period of 2017. On February 22nd, 2019, Jefferies Financial Group upgraded its rating on the stock to ‘Buy’ from ‘Hold’, while also boosting its price target to $73.00 from $64.00. Harvest Capital Strategies reported holding 475,000 Citigroup’s shares with a value of $24.73 million at the end of Q4 2018, a position that accounted for 6.9% of its equity portfolio.

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This article was originally published at Insider Monkey.