Hedge fund XN was one of 2020’s largest new funds. Gaurav Kapadia is off to an impressive start.


XN, which raised $1B last when it launched last July, filed its first 13F on Feb. 16. For Q4, the fund reported managing $1.53B in 13F securities. The XN hedge fund filed jointly with its affiliate XN Exponent Advisors.

According to a Dec. 10 story in the Financial Times, the XN hedge fund returned 46% in its first five months of trading. In the article, XN’s founder and principal owner Gaurav Kapadia discussed opportunities for shorting blank check stocks.

13F filings do not disclose short positions. However, XN reported 22 long holdings, with a top 10 holdings concentration of 66.71%. Westinghouse Air Brake Tech (WAB) was the fund’s #1 position, comprising 10.74% of the 13F portfolio. Followed by Altice USA (ATUS) and Marriott Int’l (MAR).

Kapadia started XN after leaving Soroban Capital, a hedge fund he co-founded in 2010.

The best investments…emerge from temporary dislocations where XN can see through the short-term fog to find special businesses at compelling risk-adjusted valuations.

Here’s how XN describes its investing methodology in its most recent ADV.

XN’s investment decisions reflect XN’s core principles: concentration, deep research, and flexibility…XN seeks to run a concentrated, long-biased portfolio of investments that can compound at exceptional rates…

Hedge Fund XN’s long holdings by market cap.

XN’s Clients’ public investments long portfolios generally consist of 10-15 core positions and, from time to time, a somewhat greater number of short positions, in each case, that XN believes meet certain criteria… XN’s belief is that the best investments… emerge from temporary dislocations where XN can see through the short-term fog to find special businesses at compelling risk-adjusted valuations. XN seeks to invest during these periods of uncertainty and to monetize its insights through differentiated research, discipline and patience and relies on these qualities to find businesses whose quality, growth, and earnings are materially underappreciated and offer asymmetric return profiles.

You can analyze XN’s portfolio in detail at WhaleWisdom.com.


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