Greenhaven Road Capital, an investment management firm, published its second quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly return of approximately 6% net of fees was recorded by the fund for the second quarter of 2021, bringing YTD returns to approximately 21%. You can view the fund’s top 5 holdings to have an idea about their top bets for 2021.
In the Q2 2021 investor letter of Greenhaven Road Capital, the fund mentioned KKR & Co. Inc. (NYSE: KKR), and discussed its stance on the firm. KKR & Co. Inc. is a New York, New York-based private equity company, that currently has a $37.1 billion market capitalization. KKR delivered a 57.59% return since the beginning of the year, extending its 12-month returns to 80.41%. The stock closed at $63.81 per share on July 29, 2021.
Here is what Greenhaven Road Capital has to say about KKR & Co. Inc. in its Q2 2021 investor letter:
“Our top five holdings represent more than half of our total long exposure and therefore five greatly influence overall returns (which includes) KKR (KKR) – KKR remains an extremely resilient business with an A+ team enjoying the secular tailwinds of the migration of investable dollars toward alternative assets, where large allocators like the returns and love the muted volatility.”
Based on our calculations, KKR & Co. Inc. (NYSE: KKR) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. KKR was in 56 hedge fund portfolios at the end of the first quarter of 2021, compared to 54 funds in the fourth quarter of 2020. KKR & Co. Inc. (NYSE: KKR) delivered a 13.61% return in the past 3 months.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage.
Disclosure: None. This article is originally published at Insider Monkey.
