Whitney Tilson's Releases First Annual Letter Of His New Fund; Discloses -1.7% 2012 Drop

Tyler Durden's picture


Wondering why AAPL is finally soaring after stagnating for days? Because the market finally knows that Whitney Tilson sold his handful shares of AAPL. We learn all this and much more in today's humorous interlude - the first annual letter out of Kase Capital. What is Kase Capital? "Now that I’m managing money solo, I’ve adopted the name “Kase”, so our fund is now doing business as the Kase Fund. The letters of “Kase” come from the four most important people in my life: my wife, Susan, and three daughters, Alison, Emily, and Katharine. May they bring all of us as much good fortune as they’ve brought me!" And yes, the always "imaginative" 13F-ghoster took that particular idea from Barry Rosenstein's Jana Partners.

The full letter is presented below, but the first two paragraphs are worth the price of admission alone:

After 11½ strong years, the fund has lagged badly over the last 2½ years. To turn things around, I’ve made many changes (discussed below), most importantly returning to my roots of managing money solo.


In June, Glenn and I decided to each run our own funds, and began doing so on July 1st. As part of this process, I took our fund to cash so that I could rebuild the portfolio from scratch. However, I wasn’t able to exit a handful of illiquid positions, most notably the Iridium warrants, which impacted performance in the second half of the year, but today I’m pleased to say that the portfolio is where I want it, conservatively positioned in my very best ideas. My mind is clear and focused on the long term, and I’m looking forward with confidence and optimism.

And the conclusion:

After a strong 12-year run, 2011 and 2012 were lost years. I feel very badly about this and apologize to you. But I know you don’t want an apology – you want performance! To that end, I’ve reflected on the mistakes I’ve made, learned from them, and taken significant steps to maximize our chances of success going forward: I’m now the sole portfolio manager and have dramatically simplified, focused, and de-risked the fund. I’m confident that my strategy is sound, I will execute it well going forward, and we will all profit.


I’m heartened and humbled that the vast majority of the fund’s partners have chosen to maintain their investment. I’m determined to reward your vote of confidence and want to thank you for your patience, confidence and support.

It is unclear just which extended family members he is referring to. And no, there is no mention of Tilson's recently favorite Herbalife short anywhere.

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Tue, 02/05/2013 - 15:52 | 3217273 knukles
knukles's picture

Hey, that's not so bad.
Down a 1% or 2% with the S&P up 15% and using leverage.

I mean, it's close enough for government statistics, no?

Tue, 02/05/2013 - 15:54 | 3217283 redpill
redpill's picture

If these dumb fuckers still leave their money with this douchebag after all this then they'll get exactly the return they deserve.

Tue, 02/05/2013 - 15:58 | 3217296 Say What Again
Say What Again's picture

Seriously, how does this guy continue to raise capital?

This is a serious question, because I want to start a fund, and I'll name it after the women in my life too.

Tue, 02/05/2013 - 16:01 | 3217312 redpill
redpill's picture

We should start a fund called "You Dumb Fucking Muppets Don't You Dare Invest In This" and I bet it would be wildly successful in terms of capital raised.

Tue, 02/05/2013 - 16:07 | 3217349 Say What Again
Say What Again's picture

There are a number of strippers on LinkedIn that state their career as; "Financial Planning."

I have no doubt that they could beat 50%, or more of the "professionals" on the street.

Tue, 02/05/2013 - 16:22 | 3217393 CClarity
CClarity's picture

Do his investors really want to hear the drivel about name changing the fund after the women important in his life?  That alone is reason to leave.  And KASE?  Why not Sake or better eaks?  Or add a T for Tilson and have steak or stake.  Again, guy doesn't seem too brignt.

Tue, 02/05/2013 - 17:33 | 3217698 jcaz
jcaz's picture

So..... He's let everyone go,  changed the name and phone number of the company....

Just like any good Florida bucketshop does- very nice......

Tue, 02/05/2013 - 23:41 | 3218843 Buck Johnson
Buck Johnson's picture

That is why I agree with the other commenter.   If people are stupid enough to still stay with this guy they get what they get in the end.

Tue, 02/05/2013 - 16:06 | 3217345 NotApplicable
NotApplicable's picture

"Bitchez," bitchez!

Tue, 02/05/2013 - 15:53 | 3217276 Killtruck
Killtruck's picture




Tue, 02/05/2013 - 15:54 | 3217279 css1971
css1971's picture

His fund is the Cheese fund?

Tue, 02/05/2013 - 15:54 | 3217281 Neethgie
Neethgie's picture

how the feck can he be down, in this market, all you have to do is hit buy, on roundabout ANYTHING


Tue, 02/05/2013 - 15:56 | 3217290 redpill
redpill's picture

Seriously if you watched this guy and just did the exact opposite of his investments you'd do quite well.

Tue, 02/05/2013 - 15:54 | 3217284 NEOSERF
NEOSERF's picture

De-risked the fund?...tell me why I want to pay those fees for a de-risked fund?  If I invest in hedge funds, I expect insider information, nothing less.

Tue, 02/05/2013 - 16:12 | 3217367 spastic_colon
spastic_colon's picture

translation - "I'm all in cash"

Tue, 02/05/2013 - 16:25 | 3217403 slightlyskeptical
slightlyskeptical's picture

Derisked the fund? The fund derisked itself as it's holdings plunged in value. LOL


Tue, 02/05/2013 - 15:55 | 3217285 TruthInSunshine
TruthInSunshine's picture

The biggest bear market rally, 3 1/2 years running now, in history, and Tilson lost money in two of the biggest run-up years?

This is why so many actually good AUM professionals returned all funds back to limited partners/investors and closed shop over the last 3 years (can we get a list of the top bracket managers, Tylers?); you're either on the New York Fed best friends forever list, with access to all that this entails, or you're just gambling, in these "markets."


Tue, 02/05/2013 - 16:00 | 3217308 RSBriggs
RSBriggs's picture

CONTRARIAN ALERT:  Tilson sells Apple stake....  TIme to buy....

Tue, 02/05/2013 - 16:04 | 3217321 LongSoupLine
LongSoupLine's picture

Fucking hedge fund prick. Who gives a fuck what this vulture is doing?

Just another CNBC fucktard "Market Master".


Fuck off Tillson. Ass.

Tue, 02/05/2013 - 16:03 | 3217324 buzzsaw99
buzzsaw99's picture

And by "ALL" I mean ME.

Tue, 02/05/2013 - 16:04 | 3217330 sitenine
sitenine's picture

What kind of fucking retard would let this idiot 'invest' for them? "I'm sorry, I'll do better next time." WTF??

Tue, 02/05/2013 - 16:04 | 3217332 brucyy
brucyy's picture

just wait for the last bear to go long annnnnd its gone !

Tue, 02/05/2013 - 16:05 | 3217337 Frank N. Beans
Frank N. Beans's picture

funny stuff, he should go back to his previous profession: comedian


Tue, 02/05/2013 - 16:05 | 3217340 IamtheREALmario
IamtheREALmario's picture

Kase? Is that like in CHEESE?

Tue, 02/05/2013 - 16:21 | 3217391 Troncom
Troncom's picture

A chimpanze with a pin could of done as well over the past 14 years

Tue, 02/05/2013 - 16:24 | 3217398 Dr. Engali
Dr. Engali's picture

Good Lord hang it up. You would think after this long his family would have pulled what's left of the money he "manages" away fro him.

Tue, 02/05/2013 - 16:25 | 3217401 Atlantis Consigliore
Atlantis Consigliore's picture

Buy buy buy, sell sell sell, buy buy buy sell sell sell, THEY KNOW NOTHING,......NOTHING......

must be like syphilis or real estate....a handicap  worth 2/6  in payouts, you know  like Mutual Funds,  (laughter) 

Tue, 02/05/2013 - 16:26 | 3217406 Kiwi Pete
Kiwi Pete's picture

He shoulda renamed it the Black Panty Fund. Firstly it would generate alot of interest as to what's in it and second when it does badly he could say quite truthfully that it's just pants.

Tue, 02/05/2013 - 16:37 | 3217450 Rustysilver
Rustysilver's picture

So, does he still get his 2/20?

Tue, 02/05/2013 - 16:40 | 3217465 Smuckers
Smuckers's picture

Let's get this fucking crash started.


I am so fucking bullish on the market right now, I have sold my house, car and clothing and put everything into UDOW.
I am living in a tent at the back of an abandoned mall parking lot with a can of fart-free beans until I can safely retire a billionaire.
The market is only going up.  I have no more assets to sell for grabbing a piece of this great rotation.
PMs suck.

$bullish := 999


if count($bullish)>100{


Tue, 02/05/2013 - 20:31 | 3218296 Say What Again
Say What Again's picture

ERROR: 4040404 Stack Overflow

Tue, 02/05/2013 - 16:42 | 3217472 devo
devo's picture

Translation: "I bought SPY"

-ludwig von feces


Tue, 02/05/2013 - 17:32 | 3217695 Squid Vicious
Squid Vicious's picture

the last time Netflix had this market cap he thought it was a screaming short... now it's one of his biggest holdings? wtf?

Tue, 02/05/2013 - 18:21 | 3217883 babylon15
babylon15's picture

I took Tilson's beta adjusted returns and came up with these results:

Sharpe ratio: 0.13

I'm assuming he posted his returns gross of fees, and I'm assuming the S&P 500 series he used included dividends.

Tue, 02/05/2013 - 20:35 | 3218310 GFORCE
GFORCE's picture

Quite embarrassing that you can't make money over the course of a year. Tilson is a loser. 

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