Mangrove Partners is among the best performing hedge funds in previous years. It was symbolically named after a tree species that is extremely resistant, able to bear everything from storms to hurricanes. Correspondingly, Mangrove Partners aims to be tough in the financial markets. It was founded by its current president and portfolio manager, Nathaniel August, who gained valuable investing experience while working as a director at White Eagle Partners, as an Investment Analyst at K Capital Partners, as a Senior Analyst at Brahman Capital Partners, and as an Analyst at Goldman Sachs in the Principal Investment Area. Nathaniel August holds a B.A. from Brown University.
Aside from his vast experience, Mr. August brought something else to his fund – investing genes. Both his parents were money managers; his mother, Nancy, was one of the first female partners in Wellington Management, and his father, Donald was an original partner in Frontier Capital. An inherited passion for investing lead him to start his own fund back in 2010, with only $12 million in AUM.
Mangrove Partners mainly relies on four core strategies: long/short, stressed and distressed, capital structure arbitrage, and liquidations and arbitrage. In the first three years following its inception, Mangrove Partners returned an eye-popping 44% annually. 2014 was also a good year for the fund, as it returned 26.6%, pushing its average annual return to 20.6% between 2012 and 2014. The fund then returned an impressive 50.6% in 2016 to average 23.3% between 2014 and 2016, ending up second among Barron’s top 100 hedge funds in 2017. As for more recent data, the fund had a return of 8.9% in 2017 and averaged 17.2% between 2015 and 2017, ranking 16th among the top 100 hedge funds in 2018. Currently, Mangrove Partners’ portfolio is valued at $1.55 billion, whereas its recent AUM figures weren’t available.
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On the next page we’ll check out Mangrove Partners’ most important portfolio moves in the second quarter of 2018.
Let’s take a look at Mangrove Partners’ recent moves by checking their holdings as reported in their 13F filing with the Securities and Exchange Commission for the second quarter of 2018. Out of 32 reported holdings, the fund’s largest stake was is in Penn Va Corp New (PVAC), with the fund owning 1.44 million shares worth around $122 million. Smart investors from our database were also getting more bullish on Penn Va Corp NEW (PVAC), with 20 funds owning long positions at the end of the second quarter vs. 14 positions at the end of the first quarter.
There were eight additions to Mangrove Partners’ portfolio in the second quarter, and the biggest one was in Cai International Inc. (CAI), with the fund obtaining a 306,578-share position worth around $7.13 million. The other companies that were added to Mangrove Partners’ portfolio in the second quarter included Fly Leasing Ltd (FLY), Spirit Mta Reit (SMTA), Adient Plc (ADNT), New Frontier Corp (NFC), Thunder Bridge Acquisition L (TBRGU), and Twelve Seas Investment Co (TWLVU).
The fund also boosted and lowered some positions, with the biggest increase being in Aldeyra Therapeutics Inc (ALDX), with the fund now holding a position valued at $3.45 million after raising it by 34% to 434,344 shares. On the other hand, the fund significantly lowered its stake in Atlantic Power Corp (AT), almost halving its position to 5.97 million shares valued at $13.13 million.
Furthermore, Mangrove Partners also dumped eight companies during the second quarter that were in its portfolio at the end of March. The largest position the fund said goodbye to was in AerCap Holdings N.V. (AER), selling all 473,438 shares it had owned on March 31. Next in line was Spirit Realty Capital, Inc. (SRC), as Mangrove sold off 2.56 million shares valued at $19.9 million at the end of March. Other companies in which Mangrove Partners lost faith includes Tier Reit Inc. (TIER), Genco Shipping & Trading Ltd. (GNK), Steel Partners Holdings L.p. (SPLP), Ofg Bancorp (OFG), and First Bancorp (FBP).
Disclosure: None
