ValueTalks: Full Audio Interview And Transcript With Famed Shortseller Sahm Adrangi, Founder Of Kerrisdale Capital

Today is an in-depth rare (first audio?) interiew with the founder and CIO of Kerrisdale Capital, Sahm Adrangi. Adrangi made his name as  one of the first and famed shortsellers targeting mostly Chinese frauds. We discuss his views on investing, activist short selling, and the use of social media as a tool for activist shorts. Sahm, recently presented at the Kase Learning Short Selling Conference in New York. He presented on GARG and you can watch the presentation here

Q3 hedge fund letters, conference, scoops etc

 

Audio available for all readers and full 8900 word human transcript for our premium subscribers – enjoy!

 

Good morning, podcast listeners, today’s a very special episode. I am joined with the CIO and founder of Kerrisdale Capital, Sahm Andragi. He launched his fund back in 2009 with under a million dollars and it’s grown to over a 150 million as of July 2017. He’s best known for exposing Chinese frauds, and one of the most well-known activist short sellers. He worked at Deutsche Bank and Leveraged Finance Group, and a few years at a distressed debt hedge fund, Longacre. He’s a graduate of Yale University with a BA in economics. I want to welcome Sahm to the show and I want to welcome our listeners to a very special episode.

Welcome to Value Talk with Raul.

So welcome to our listeners, so today’s episode I have Sahm Andragi from Kerrisdale Capital. Welcome to the show.

Thank you.

Yeah. So, if you can just tell me what led you to finance and investment?

So, I was an economics major in college, and I was an aspiring journalist. So, I wrote for the opinion section of my college paper junior year and was … I wrote … I was opinions editor in my junior year, I was a columnist in my senior years, I was a reporter my [inaudible] year. And so, the summer after junior year I got a job in a newspaper. And since I was an econ major I wanted to go into business reporting. So, writing for the business sections of newspapers. And, you know, over the course of that summer and the following year, the following summer, you know, I picked up a lot of books on business stories. I think there was a really good book in the 80s about Michael Milken written by James Stewart and, you know, [inaudible]. So, I was just reading these sort of nonfiction finance oriented books about companies and private equity and hedge funds and stuff at the time. I mean this is, you know, these books were about what was happening the 80s and 90s. And that one of those books was [inaudible] Warren Buffett, the [inaudible] biography. And I think at the end of the book I just sort of thought to myself, hey, this is really cool, it doesn’t seem that difficult, seems like an interesting, you know, potential career trajectory.

Then I read the Intelligent Investor and I read a few more books about value investing and became interested in value investing and around the same time I sort of was realizing that journalism was not necessarily going to be, you know, me when I originally thought it, you know, it might be when college I … in college, when I want to go into journalism. And then I also just didn’t … my internship wasn’t extended to a job. So, I [inaudible] for a job, so I sort of took my [inaudible] and since I was becoming interested in investing I moved down to New York and got an investment banking job so that I could, you know, potentially get down … go down the path of becoming an investor. And over the course of my time in banking, I became more interested in that and then became interested in investing and I think pretty early on I was a Deutsche Bank, and then the Leveraged Finance Group. You know, I ultimately wanted to go on the buy side. And, you know, I applied for some private equity jobs but … but some hedge fund jobs while I was in banking. And then over time sort of realized hedge funds were a little bit more of a fit.

I actually went to work for another investment bank for just over a year, it was the creditor side, restructuring firm. So, I specialized in advising bondholder committees, bank debt committees and then out of the money, equity or preferred equity committees. And they had a lot of relations with hedge funds, and it was a good stepping stone to ultimately go to distressed . I think the more time it spent at Leveraged Finance the more realized I wanted to go to the hedge fund side as opposed to the private equity side. And then distressed was really interesting, it was a good extension of sort of a leveraged finance background. So, I went to work for a restructuring firm, it was called Chanin. And then after over a year there and sort of three years of banking I got a job at a firm called Longacre I was at Longacre for two years and then I left Longacre and decided just to start a fund. Well, I was 28 at the time and just started building a track record and going from there.