Alphyn Capital Management: “KKR can Double Over the Next 5 Years”

Jose Karlo Mari Tottoc
·3 min read

Alphyn Capital Management, an investment management firm, published its first quarter 2021 investor letter – a copy of which can be downloaded here. A return of 6.8% was reported by the fund in the Q1 of 2021, outperforming its S&P 500 TR benchmark that delivered a 6.2% return in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Alphyn Capital Management, in their Q1 2021 investor letter, mentioned KKR & Co. Inc. (NYSE: KKR) and shared their insights on the company. KKR & Co. Inc. is a New York-based private equity company that currently has a $29.9 billion market capitalization. Since the beginning of the year, KKR delivered a 28.45% return, extending its 12-month gains to 117.16%. As of April 12, 2021, the stock closed at $52.01 per share.

Here is what Alphyn Capital Management has to say about KKR & Co. Inc. in their Q1 2021 investor letter:

"On February 1st, KKR closed its previously announced acquisition of Global Atlantic, one of the largest fixed rate and fixed annuity providers in the US. The benefit to KKR is that it will both consolidate GA’s operating earnings and generate fees from investing GA’s insurance “float.” KKR recently updated the market on the value of GA’s assets, reporting a 25% increase to $90bn. This has positive implications for both the management fees that GA will generate for KKR in the future (management expected $200m in incremental fees from the transaction, it seems clear that this will be an underestimate) and insurance operating earnings. KKR is firing on all cylinders and I believe the stock can double over the next 5 years. I therefore added to our position."

Ghost Tree Capital's AUM, Returns and Holdings
Ghost Tree Capital's AUM, Returns and Holdings

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Our calculations show that KKR & Co. Inc. (NYSE: KKR) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, KKR & Co. Inc. was in 54 hedge fund portfolios, compared to 50 funds in the third quarter. KKR delivered a 28.17% return in the past 3 months.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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Disclosure: None. This article is originally published at Insider Monkey.