Toronto hedge fund with 45% returns in DOJ probe of short sales
BNN Bloomberg
Far off the hedge fund world’s usual map is a small firm in Toronto, filling out the second floor of a tidy brown office tower, just above a pizzeria.
Far off the hedge fund world’s usual map is a small firm in Toronto, filling out the second floor of a tidy brown office tower, just above a pizzeria.
From that perch, Anson Funds and its 41-year-old leader, Moez Kassam, have been posting returns that are multiples the industry norm. It’s also punching above its weight in controversies. Reddit boards and websites have sprung up to question the propriety of how it bets on the ups and downs of stocks. So too have lawsuits.
And now, Anson has an unwelcome distinction in a U.S. Justice Department inquiry examining the tactics used by short sellers: Of dozens of firms that Bloomberg has identified as being mentioned in prosecutors’ sweeping requests for information and communications, Anson is among a smaller number that have been subpoenaed directly, according to people familiar with the matter. Exactly what’s prompting that level of attention isn’t clear.
A Justice Department spokesman declined to comment. Kassam referred questions to a lawyer who offered no comment.
On the roster of money managers and stock researchers whose names have surfaced in connection with the U.S. inquiry, Anson stands out to Wall Streeters as one of the lesser-knowns -- hardly on the same level as famous bears such as Muddy Waters, Kerrisdale Capital and Citron Research, whose blunt critiques of public companies have set off a number of market dramas.
But in Toronto’s investing scene, Kassam’s profile has been rising, and the firm he’s run since 2007 has been gaining momentum. In the past four years, Anson Funds has more than tripled assets under management beyond US$1.5 billion. In each of the past two years, it’s posted returns of around 45 per cent -- lifting its average annual gain since inception to almost 16 per cent. That’s more than three times the typical yearly return churned out by long-short funds in that period, according to Bloomberg hedge fund indexes.
