Special Situations Yield Strategy

Investment Objective. We aim to achieve attractive investment returns with low correlation and moderate risk.

Investment Strategy. The Special Situations Yield strategy is event-focused and value-oriented. We aim to achieve attractive risk-adjusted returns with low correlation. The portfolio emphasizes special situations investments that generate yield income and protect capital. We invest in liquid, publicly traded securities globally with market capitalizations of primarily $500 million to $10 billion. The Special Situations Yield strategy may employ leverage.

Dentonia Park takes concentrated positions in what it believes to be mispriced securities that result principally from corporate actions. Security selection for the portfolio is based primarily on fundamental analysis: bottom up research and developing a differentiated perspective, with which we create an investment mosaic to gain conviction around investment theses and events.

  • Concentrated Long Investments. Typically, investments are comprised of mispriced securities that result principally from corporate actions:
    • Post-reorganizations
    • Spinoffs
    • Financial and operational restructurings
    • Initial public offerings
    • Operational expansions
    • Transformative mergers

  • Short Selling Expertise. This discipline is intended to be profitable, and to protect the portfolio during market declines. Attributes of companies that we short include:
    • Structural change
    • Flawed business models
    • Low earnings quality and/or returns
    • Increased competition
    • Misleading accounting
    • Earnings expectations divergence

Portfolio Construction. The Special Situations Yield strategy employs a hedged approach that utilizes short sales of individual securities and ETFs, options strategies, and risk reduction by holding cash, all of which are intended to provide some defense against declines in securities prices.

Low Correlation Returns. The Special Situations Yield strategy has achieved an R2 of approximately 0.40 since inception versus the S&P 500 as well as peer hedge fund indices, which reflects the differentiated nature of the investment strategy and its expression through portfolio composition and idiosyncratic positions.