The Woman Who Is Posting Some Of The Hedge Fund World’s Best Returns
Nehal Chopra, the founder of Ratan Capital Management, is a rarity in the rich $2.8 trillion world of hedge funds these days. The vast majority of hedge fund managers have been unable to keep up with the booming stock market, disappointing their investors in recent years. But for Chopra things have been different. Chopra has consistently been bettering the stock market and posting strong returns year after year.
In 2014, Chopra’s Tiger Ratan Capital hedge fund posted net returns of 22.3%, according to an investor report reviewed by Forbes. The average hedge fund manager eked out a net return of 3.6% last year, according to HFR. The broader stock market, as measured by the Standard & Poor’s 500 index, returned 13.7% in 2014.
In 2013, Tiger Ratan Capital returned 46.8% net, crushing most hedge fund managers and beating the stock market’s big rise. In 2012, Tiger Ratan Capital generated net returns of 26.3%—another good year. Chopra’s hedge fund has scored annualized net returns of 21.3% since its inception in 2009.
Another thing that makes Chopra unique is that she is a woman in the male-dominated hedge fund industry. At 35, Chopra oversees some $750 million and is backed by hedge fund legend Julian Robertson. She received a bachelor’s degree in economics and an MBA from the Wharton School at the University of Pennsylvania by the age of 21. Given her excellent track record and Robertson’s support, the fact that Chopra has not attracted more investor money has raised some eyebrows.
A Bloomberg News article published in 2014 said that some hedge fund investors have decided not to invest with Chopra because her “management style” has resulted in her firm, Ratan Capital Management, losing key employees. Bloomberg News reported that since 2009 Ratan Capital Management has had four chief financial officers and lost four analysts. The article anonymously referred to former employees and investors who questioned her concentrated portfolio and expressed concern about Chopra sharing investment ideas with her husband, a competing hedge fund manager.
Still, the hedge fund industry tends to emphasize performance and is known for its rough-and-tumble personalities. It’s less likely that male hedge fund managers would need to manage potential conflicts with spouses who worked at other hedge funds simply because there are fewer female investment professionals in the industry. And William Ackman, one of the most successful billionaire hedge fund managers of the current era, is known for consistently keeping a relatively concentrated portfolio of investments.
Nevertheless, Chopra’s concentrated bets performed well again in 2014. According to Ratan Capital Management’s Securities & Exchange Commission filings, at the end of September Chopra’s biggest stock position was in Actavis, which agreed to buy Allergan for $66 billion in November. The deal helped Allergan brush off a hostile effort by Valeant Pharmaceuticals to buy the Botox maker. Chopra also had relatively large positions in Allergan and Valeant going into the fall of 2014, SEC filings show.
In a CNBC interview in 2013, Chopra said her investment approach focuses on “corporate change.” She is known for being an event-driven long-short equity manager. Chopra has also recently been a holder of shares of Charter Communications and Dish Network, SEC filings show.
A spokesman for Chopra and Ratan Capital Management declined to comment.