Performance – March 2022

Our tracking portfolio has returned +2.5% during March 2022 and is up 597% since 2017. A detailed performance breakdown is provided below.

During the month we have published 7 new ideas, brought 2 previously closed cases back to active ideas. Three ideas have been closed during the month.

Below you will find a more detailed breakdown of tracking portfolio returns by individual names as well as elaborations on names exited during the month.

36 ideas are currently active on SSI.



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Disclaimer: These are not actual trading results. Tracking Portfolio is only an information tool to indicate the aggregate performance of special situation investments published on this website. Quick Ideas are not part of the tracking portfolio. See full disclaimer here.

The chart below depicts returns of SSI Tracking Portfolio since the start of 2017 – these are not actual trading results but rather an aggregate performance of investment ideas published on SSI.

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The graph below details the individual MoM performance of all ideas that were active during the month of March 2022. This chart excludes Quick Ideas.

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51job (JOBS) +15% in 3.5 Months
51job, the largest job classifieds company in China received an acquisition offer by an Asian PE firm, DCP Capital Partners, at $79.05/share. The merger process got extended due to regulatory matters, while JOBS share price was decimated following Chinese regulatory crackdowns on the tech sector. BoD in concert with the buying parties seemed to be doing everything to reduce the cashout price for minority shareholders, but it seemed likely that the price cut will be limited to avoid shareholder rejection or potential lawsuits.In January, the offer got slashed to lower than expected to $57.25/share but then in March was slightly bumped to $61/share. The spread for the new offer remained volatile at 10%-20% and only narrowed to 4% after the announcement of the shareholder meeting date. The idea was closed with a 15% return in 3.5 months. Additional upside might be squeezed out by shareholders who are willing to exercise their Cayman appraisal rights.

Logan Ridge Finance (LRFC) -10% in 8 Months
Logan Ridge Finance was a small, underperforming BDC, which traded at the second widest discount to NAV – 42% vs 4% premium for peer average. Before COVID, the company was valued around its book value, however, after the dividend suspension in Q2’20 the stock lost its attractiveness to yield-seeking BDC investors and the spread widened substantially. Subsequently, Logan Ridge transitioned to the new investment manager, Mount Logan, which had a track record of turning around a similarly sized BDC (PTMN, which traded at an 18% discount to NAV) and intended to apply the same framework to LRFC. Mount Logan emphasized that it would exit LRFC’s the equity part of the portfolio and refocus on debt instead + make the reinstatement of dividends a top priority. However, the liquidation of the equity portfolio turned out to be moving very slowly, while a yield drop in the debt portfolio undercut the size of potentially restated dividends. The idea was closed with a 10% loss in 8 months.



Paramount Group (PGRE) +5% In 1 Month
An asymmetric merger arbitrage case – New York REIT Paramount Group received a non-binding proposal from its 5.5% shareholder PE firm Monarch Alternative Capital. The offer price was $12/share. The bid was opportunistic and low-ball. 15% spread reflected the risk of the offer getting rejected by the board that was in control of the founding family (combined 17.5% ownership). There was still a chance that parties will negotiate a higher price. In case of offer rejection, the downside seemed well protected by strong business fundamentals, low valuation and dividend raise after the offer announcement. Eventually, despite the rejection of the offer, PGRE shares traded upwards.


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