Locust Wood Capital Advisers’ Return, AUM, and Holdings

Back in 2002 Stephen J. Errico, a Wall Street investor, who now has more than 30 years of professional investing experience, launched his own NYC-based hedge fund, Locust Wood Capital Advisers. Aside from being the fund’s founder he is also its CIO and Controling Principal. Previously, Mr. Errico worked at Morgan Stanley as a portfolio manager, where he earned Chairman’s Club recognition and became one of the original members of the Morgan Stanley Custom Portfolio Program. He earned his B.A. in Economics from Colgate University.

The fund’s investment philosophy is value-oriented and event-driven, with the fund conducting a thorough research to identify mispriced securities. It seeks for serious market catalysts that should affect the price of a stock, such as mergers, management changes, corporate spin-offs or split-offs, acquisitions, and/or strategic changes, and similar. Locust Wood Capital Advisers prides for keeping its investors and their capital safe as possible with Stephen Errico himself being the biggest investor in the fund, and with the fund not losing any leverage at all. The fund held $1.17 billion in assets under management on a discretionary basis in February 2017, which mean it has grown a lot since its launching when it had an initial capital of $29 million.

This growth in assets didn’t happen for no reason, but thanks to the fund’s outstanding track record. We have managed to dig return figures of the last couple of years for its Locust Wood Capital Onshore Fund LP. In 2014 it brought back 7.71%, followed by 0.72% and 4.29% in 2015 and 2016 respectively. Then, in 2017 it delivered even stronger 13.57%, and last year through October it kept its positive performance, generating a return of 3.05%. Its total return amounts to 325.17%, for a compound annual return of 9.32%, while its worst drawdown was 24.26.

Locust Wood Capital Advisers’ Return, AUM, and Holdings


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Locust Wood Capital Advisers’ equity portfolio was worth around $1.28 billion at the end of the first quarter of 2019, somewhat below $1.3 billion it was valued at the end of the last quarter of 2018. During Q1, 2019, the fund initiated six new positions, and dumped 13 stocks. The biggest addition to its portfolio was Alphabet Inc. (NASDAQ:GOOG), the fifth of the 30 Most Popular Stocks Among Hedge Funds in Q1 of 2019. Locust Wood purchased 32,455 Alphabet’s shares, establishing in that manner a position that was worth $38.08 million, amassing 2.97% of its portfolio.

Among the biggest dropped positions were Medtronic plc (NYSE:MDT), FMC Corporation (NYSE:FMC), and The Coca-Cola Company (NYSE:KO). The fund said goodbye to 405,170 Medtronic’s shares with a value of $36.85 million, to 338,799 MC Corporation’s shares that were worth $25.06 million, and it sold out 469,710 Coca-Cola’s shares, which were valued $22.24 million.

During the quarter, Locust Wood Capital Advisers also lowered its positions in Berkshire Hathaway Inc. (NYSE:BRKA) and Liberty Broadband Corporation (NASDAQ:LBRDK), by 36% to 184,604 shares with a value of $37.09 million and by 45% to 83,835 shares worth $7.69 million, respectively.

Click here to read the rest of this article where we present Locust Wood Capital Advisers’ top Q1 holdings.

Disclosure: None

This article was originally published at Insider Monkey.