Updated on June 16th, 2022 by Nikolaos Sismanis

Athanor Capital is a macro-focused hedge fund founded in 2017 by Parvinder Thiara.

The firm is growing quickly – more than doubling its assets under management in 2019. Athanor Capital currently manages around $361.9 million in discretionary funds according to its most recent form ADV.

Investors following the company’s 13F filings over the last few quarters (starting with the mid-May 2019 filing through the mid-May 2022 filing) would have generated annual total returns of -4.1%. This compares quite poorly to the S&P 500 ETF’s (SPY) annual total returns of 16.1% over the same period amid the fund’s underperformance over the past few quarters.

Note: 13F filing performance is different than fund performance. See how we calculate 13F filing performance here.

You can download an Excel spreadsheet of Athanor Capital’s performance and current and historical common stock 13F holdings below:

 

Keep reading this article to learn more about Athanor Capital.

Table Of Contents

Athanor Capital’s Approach To Investing

Athanor Capital’s investment strategy is top-down. This means the firm starts with macro-economic factors to build its investment theses.

Athanor Capital does not stop at high-level macro analysis. The firm then ‘dives deeper’, performing relative valuation analysis between individual securities. This combination of ‘Top-down’ and ‘Bottom-up’ investing helps Athanor Capital to find compelling investments in compelling macro sectors. The image below gives a breakdown of the firm’s strategy.

 

Source: Athanor Capital

The company’s investment strategy is also succinctly stated in its ADV brochure:

“The Investment Manager’s process usually starts with macroeconomic observations including market dislocations, capital flows, regulatory changes, secular shifts and other major macroeconomic events. The Investment Manager seeks to determine whether these events have caused relative value mispricings. Once a hypothesis that a macro event is causing a mispricing has been established, the Investment Manager seeks to validate or disprove it. The Investment Manager will generally take significant positions if it can understand both the mispricing and its cause. The Investment Manager may also exploit opportunities outside of this process and protocol.”

Of note is that Athanor Capital looks for ‘builders’ when hiring its investment research team. Over 75% of the company’s investment and risk teams actively code. And 70% of the company’s staff are either minorities and/or women as the firm values a variety of perspectives.

Culture is set initially by a company’s founder. Athanor Capital’s founder is Parvinder Thiara.

About Parvinder Thiara

Parvinder Thiara was born in August of 1985; he is 37. Thiara is a Harvard graduate and Rhodes Scholar. He worked for DE Shaw for 8 years before setting up Athanor Capital.

A disagreement over trades in late 2015 is what caused Thiara to leave DE Shaw. According to FT.com, executives at DE Shaw concluded that Thiara was not adhering to the fund’s risk guidelines:

“Executives concluded that he had not adhered to the hedge fund’s intraday risk guidelines and that he had not shared sufficient details of his trading with executives, according to the people, though Thiara ended most days with positions that were within DE Shaw’s protocols.

The firm confronted Thiara about his trading, and Thiara’s explanation was not sufficient for the DE Shaw executives, the people said. The parties could not resolve their differences, leading to his exit. Thiara has not been accused of violating any laws or regulations.”

Thiara likely has a different interpretation of events. The emphasis on risk controls at Athanor Capital speaks to Thiara’s clear focus and understanding of risk.

The legal battle and ‘bad blood’ surrounding another talented employee at DE Shaw – Daniel Michalow – unexpectedly leaving the company shows that this is not an isolated incident. Commenting on the Michalow situation, Parvender said:

“This seems like DE Shaw’s playbook when a talented former employee leaves and chooses to compete.”

Setting aside Thiara’s past with DE Shaw, it’s clear that investors are flocking to Athanor Capital based on the firm’s rapid asset growth.

Recent Developments Regarding Athanor

Athanor’s portfolio used to be rather concentrated, comprising equities mainly in the Information Technology sector. However, following recent news regarding the fund’s underperformance as well as the death of its founder, Athanor has completely revamped its holdings.

Athanor found itself in a very challenging spot in the midst of the Covid-19 pandemic. Its Master Fund recorded tremendous losses during the March 2020 sell-off in global markets. Specifically, it recorded losses of close to 20%, which is rather significant considering funds like Athanor have multiple hedges in place. While Athanor recouped some of the losses, it ended 2020 down 3.6%. Combined with the recent death of its founder, Athanor announced that it would be returning its clients’ money back.

With the rest of its remaining funds, Athanor has purchased exclusively SPACs.

What Is a Special Purpose Acquisition Company (SPAC)?

A special purpose acquisition company (SPAC) is a company with no business activity. These legal entities are created for the sole purpose of raising capital via an initial public offering (IPO) or the intention of buying out or merging with an existing firm. SPACs are also known as “blank check companies” for this reason. While SPACs have been around for a long time, their utilization has soared in recent years, primarily due to their advantage of getting a company public much faster than the standard listing process.

Why Would Athanor Buy SPACs?

While we cannot know the actual reasoning behind Athanor’s decision to load up on various SPACs, we believe that this is likely due to the fund choosing to hold cash-like positions with some upside potential. When a SPAC raises capital (usually priced at $10 a share) the funds go into an interest-bearing trust account. They stay this way until the SPAC’s management team identifies a private company looking to go public through the merging/fast-track process.

Many SPACs have lately traded below the $10 price mark amid investor concerns that interest in SPACs (and hence the possibility to be utilized) is declining. Hence, Athanor’s reasoning may include that they are buying the cash value of SPACs for cents on the dollar. Instead of holding their cash in liquid form, in other words, they are essentially doing so with some upside potential involved.

Additional Resources

See the articles below for analysis on other major investment firms/asset managers:

If you are interested in finding more high-quality dividend growth stocks suitable for long-term investment, the following Sure Dividend databases will be useful:

The major domestic stock market indices are another solid resource for finding investment ideas. Sure Dividend compiles the following stock market databases and updates them regularly: