2022 was a year with high dispersion in performance. I already wrote about probably the most notably bad performance, Donville Kent losing nearly 60% .
The hottest hedge fund of 2022
Bloomberg’s Layan Odeh wrote late last year about Vivid Energy Fund, a fund that ended the year up north of 40%. (It’s not affiliated with Vivid Entertainment, I can only assume). Vivid has been around 2014 and manages “well under $50m” per official disclosure. The fund started with an oil and gas focus initially, but in 2019 evolved to embrace the transition to renewable energy and decarbonation (while still keeping some oil and gas exposure). Their big gains of 2022 were a function of well-timed shorts in copper, some good shorts in lithium, as well as some good longs in lithium. They also had some wins in oil and gas and a few uranium names. The fund also had a 46% gain in March 2020 by making a large short bet on cruise lines. It’s a pretty volatile fund: from inception to the end of 2019, you’d be down 33%. But from that point on, you’d be up over 300%. The overall gain is 150% from inception. The manager is one James Bradford, who comes out of RBC DS.
Some perennial winners
There were also several other funds with positive single-digit performance, such as Anson (up 7.6%) and various Waratah funds. If you want to track hedge fund performance closely, join the free mailing list operated by Brian Viveiros of Stack Capital ( brian@stackcapitalgroup.com ).
There’s also a paid service that tracks a broader array of Canadian money managers called Global Manager Research .
Venator
Brian Viveiros originated his mailing list when he was the biz dev guy at Venator. When I wrote my post on Donville Kent, people said: what about Venator? They are right, the Venator Select Fund is giving Donville Kent a run for its money: down 60% for the full year. It’s a classic case of “cheap” stocks getting “cheaper”. Both Jason Donville and Brandon Osten were analysts at Sprott Securities (now Cormark) before launching their hedge funds. The buyside doesn’t think highly of sell-side analysts. I disagree with such elitism, but with results like these, they’re not making it easy. The Venator Founders Fund did better, only down 45%. Venator now manages $137m. Venator’s slogan should be: Like a senator, but even less useful.
Brian Viveiros and a senior Venator PM, Jeff Parks, left in 2021 to form a publicly traded growth VC fund called Stack Capital. Venator still benefits from having Earl Rotman as Chairman, he was a co-founder of Genuity Capital Markets. Venator also briefly had recurring OPM Wire character Avner Mandelman as a director.
Darcy Morris and Ewing Morris
This brings me to what I really care about: people and polemics. Google sends me reports of new search queries people use to find my blog.
Recently, people have been looking for “Darcy Morris wife.” This is unacceptable. I don’t write some gossip rag that talks about the personal life of Bay Streeters. I have written twice before, not very charitably, about Darcy Morris’s hedge fund, Ewing Morris. Well, I now have egg on my face because after two relatively good years, the flagship Ewing Morris Opportunities Fund is compounding at 4% annualized for the past 5 years. Last year, they were down marginally up to November. Ewing Morris has undergone some restructuring. They no longer advertise a blue chip “board of advisors.”
In January 2022, they hired former Kingsdale Advisors CEO Amy Freedman to lead their new engagement investing mandate (aka activist investing). Ewing Morris is involved in a campaign against First Capital REIT's management. First Capital is being advised in the matter by Kingsdale. So Ewing Morris bounces back from its disastrous performance record and goes into advising other businesses how they should be run. I have to respect the quality balls here.
The only reason I mentioned Darcy Morris’s wife Devin Connell is because she’s the link to Ewing Morris’s longtime benefactor, the philanthropist (in more ways than one) Martin Connell. Martin backed Ewing Morris to the tune of $20m, but there were some tensions due the the firm's poor performance. Martin is no longer a director of the firm. The split might be deeper still. Darcy Morris has been seen around town lately with one Shelly Avital, as alert readers saw from the society pages. There was a sale of the matrimonial home in Rosedale in mid-2021. Whether that’s due to a conscious uncoupling with Devin or otherwise, that’s beyond the scope of this publication.