Performance – October 2022

SSI tracking portfolio is up by 3.2% in October. We are now up 5% YTD. A detailed performance breakdown is provided below.

During the month we published 2 new Portfolio Ideas, highlighted 12 Quick Idea Pitches in our weekly reports, and closed 1 idea.

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.


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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 September 2022. This chart excludes Quick Ideas.

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Ambac Financial Group (AMBC) breakeven after 8 Months
The case revolved around Ambac’s litigation against toxic real-estate-backed mortgage issuers from the GFC. Litigation against BoA was comprised of two suits seeking $2.2bn (+$600m in the related court cases) in damages and doubled that figure in interest rate accruals over the last 14 years. The trial began in September. In October, parties reached a settlement of $1.84bn resolving all the claims brought against BoA. The settlement turned out to be much lower than expected. The proceeds added about $8.7/share to AMBC’s book value increasing the adjusted total book value to around $25.9/share as of Q2 (2x of AMBC’s share price at the time). AMBC’s share price jumped up +15% on the announcement then reversed and settled around the write-up levels.

Bluerock Residential Growth REIT (BRG) +2% in 8 Months
Bluerock Residential Growth REIT was a real estate investment trust that owned a portfolio of multifamily and single-family rental properties. In December 2021, it was announced that Blackstone (BX) had entered into a definitive agreement to acquire BRG at $24.25 per share in an all-cash transaction. Before the acquisition, BRG would be spinning off its single-family rental business to shareholders. Pro-forma for BX acquisition the to-be-spin-off was valued at only $2.55/share vs $5.6/share value previously estimated by Duff & Phelps. The transaction was completed as expected, however, the spin-co continued to trade at 50% discount to its NAV. The idea was closed at around breakeven.


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