Clearfield Capital Hedge Fund Gains 7.5% In February On Investments In European Payment Processors – Forbes

Posted: March 2, 2020 at 4:44 pm


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February was a chaotic month for equity markets, with the Dow Industrial Average and S&P 500 Index each dropping around 12% in the last week of the month alone. Fears around the coronavirus drove selling, as concerns over the outbreak led investors to seek the relative safety of bonds and other fixed-income investments.

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Some hedge funds managed to buck the trend. One of these is Clearfield Capital, a New York-based special situations fund started by Phil Hilal in 2015. The $300 million fund was up 7.5% last month thanks in large part to investments in a pair of payment processors, according to an individual with knowledge of the matter. The companies are Paris-based Ingenico Group and Milan-based Nexi S.p.A., which had its initial public offering last year.

Shares of Ingenico, which trades over-the-counter in the U.S. under ticker INGIY, gained about 20% in February, even after dropping from their highs in the sell-off last week. A new management team has accelerated the growth rate of Ingenicos payments-processing business and Clearfield portfolio managers anticipate an eventual divestment of the slower-growth equipment business.

Nexi, which trades on the Milan stock exchange, was up about 10% in February. The Italian company has gained about 75% since its April IPO. Nexi has significant opportunities to optimize its cost structure as well as to acquire Italian assets that would be accretive to its earnings per share, said the person familiar.

Clearfield is now up 12% the first two months of the year, following gains of 35% in 2019. The fund also benefited from a pair of long positions in U.S. stocks this year: TransDigm Group (TDG), a Cleveland-based aerospace components manufacturer, and Motorola Solutions (MSI). It is also short a few names in the industrials sector.

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Clearfield Capital Hedge Fund Gains 7.5% In February On Investments In European Payment Processors - Forbes

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March 2nd, 2020 at 4:44 pm

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