CHICAGO (HedgeWorld.com)–Commodity Trading Advisor Kottke Associates LLC launched its first long/short equity hedge fund on Oct. 1 with US$1 million in proprietary capital.
The Kottke Equity Long/Short Value Fund LLC is being offered through Kottke’s Eisner Funds Management Division, which is managed by Scott Eisner, who joined the firm earlier this year.
Mr. Eisner is using an investment approach in which portfolio decisions are made quarterly and are solely based on the balance sheet and income statements as contained in the latest corporate Securities and Exchange Commission 10-Q and 10-K filings. Proprietary valuation formulas and GAAP interpretations are applied to the fundamental research process. Traditional measures such as price to earnings ratios and owners equity are completely discarded by the manager as being potentially misleading.
Twenty holdings on both the long- and short-side of the portfolio make for almost a market-neutral approach, Mr. Eisner said. But he doesn’t focus on creating a beta and sector neutral portfolio, he added. The review of the income statements of 110 companies on a quarterly basis drive his investment decisions, and the fund will conduct key trades four times a year.