Last year's top-performing hedge fund in the United States, what is its background?

Last year, Rubric was not focused on semi, but on deep value stocks.

Many people sent me this chart, asking for my opinion. The source of this chart is actually from Bloomberg's hedge fund reporter, and I don't know who helped check the 13F, so thanks to the reader for that, copyright belongs to the original author hedgevision.

The hedge fund with the best performance globally last year was Rubric, with a scale of $3.5 billion and a net return of 81% after fees. It is also the top performer in my portfolio, but there is another one that also hit SPOT and APP, which is over 80%, but is not listed in this table. The head of Rubric is David Rosen, who is the top player in value stocks at SAC, once known for being able to achieve a human Sharpe ratio of 5. He already had an independent Rubric brand within SAC and is one of the few who succeeded with a long-only style on the platform. He is one of the smartest PMs I have ever seen, knowledgeable in many areas, and willing to use leverage. However, he left SAC because he had a bad year, and Steve wanted to reclaim some GMV, as at that time, the money at SAC was all Steve's own money, so Rosen left.

He has a very special skill, which is being very left-sided. From predicting the SVB incident to predicting the undervaluation of IPP assets, he has been at least six months ahead of the catalysts. Of course, being right in predictions does not necessarily mean making money. For example, in the summer of 2022, he anticipated the SVB incident, and when SVB actually happened in March 2023, he shorted crypto based on fundamentals, but who would have thought that the Treasury would bail out the market and crypto would surge, leaving him with a net zero for 2023.

Most people wouldn't dare to invest in his Talen position, but it should be noted that his Talen was picked up from the bonds of a bankruptcy restructuring, showing remarkable patience and an astonishingly low cost. At first glance, his Talen also seems to be an AI beneficiary stock, but when he invested, it was truly a fighter in fundamentals, without any consideration of AI grand strategies. He loves to write, and his quarterly letters are very informative; he is also a deeply concerned American Jew worried about anti-Semitism. Often, there are only a few experts in a specific vertical strategy, which is precious, and one must understand the ecosystem. Rosen was very friendly back then; while chatting with the COO, he just popped in to say hi, but now that he’s famous, you can't see him for every $25 million investment, and it has to be old clients.

Rosen learned about distressed and deep value at Blackstone restructuring; he believes that deep value is essentially about how to assess a business and how cheap the price is. Later, he went to Green River Management to learn about shorting and portfolio construction Afterwards, under SAC's CR intrinsic, it is a department under SAC that expands fundamental research, pitching to Steve. Six months later, Steve transferred him out of intrinsic, and starting from December 2006, he had his own portfolio, which was the largest portfolio in the company when he left. Rubric was given a separate brand for the Rosen portfolio while at SAC and became independent in October 2016.

More than two years ago, he commented on Talen: "Talen is also a distress investment. Talen owns very efficient nuclear power plants in the U.S., bonds bought at 30 cents are now priced at 70-80 cents." With the enjoyment of directly buying assets and experiencing the various inconveniences of Talen having a large position in the main fund, Rosen launched a PE fund in the second half of last year, intending to place assets he plans to hold long-term here, where the sea is wide and fish can leap. At the time of launch, there was not much response, nor was there an oversubscription; perhaps now that it has gained fame, it might be different.

In short, he is a player in distress and value stocks. He has not made money from Nvidia, nor does he have the great dream of AI; he just wants to find undervalued high-quality assets, and in fact, most of his positions are not very concentrated. Compared to Ba-Mang Lu Ping, the businesses he buys are difficult for international retail investors and Coatue to understand, which is also a huge moat. His biggest conviction now is that generics are about to welcome a new curve, and we will wait and see.

Source: Overseas Hedge, original title: "Last Year's Performance One"

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