Gates Capital Management Reduces Risk After Rare Down Year [Exclusive]

Gates Capital Management’s ECF Value Funds have a fantastic track record. The funds (full-name Excess Cash Flow Value Funds), which invest in an event-driven equity and credit strategy, have produced a 12.6% annualised return over the past 26 years. The funds added 7.7% overall in the second half of 2022, outperforming the 3.4% return for the Russell 2000 Value Index over the same period. They lost -26.4% in 2022 net of expenses. Equity positions detracted -23% from performance, while credit positions detracted -3%. The fund returned 33% in 2021 and 19% in 2020, with equities and credit adding 29% and…