Thornburg Long/Short Equity Fund Looks to Capitalize on Finding and Exploiting Overvalued Situations

August 22, 2018


Bimal Shah is an Associate Portfolio Manager for Thornburg Investment Management, Inc. He joined the firm in 2014 as an Equity Research Analyst and was promoted to Associate Portfolio Manager in 2016. Prior to his joining Thornburg, Mr. Shah was a senior investment analyst at Waterstone Capital Management and a research analyst at Macquarie Securities Group. He also held various management positions at Citigroup in New York.

Connor Browne, CFA, is Portfolio Manager and Managing Director of Thornburg Investment Management, Inc. Mr. Browne joined the firm in 2001 as an Associate Portfolio Manager and was promoted to Portfolio Manager in 2006. Mr. Browne graduated cum laude from Princeton University with a B.A. in economics and a certificate in finance.

In this in depth 3,450 word interview with the Wall Street Transcript, the two finance professionals explain the construction of their mutual fund and its top returning picks, both long and short:

Thornburg Investment Management is based in Santa Fe, New Mexico. We’re a mutual fund and institutional account manager with around $50 billion in client assets under management. The goal of the Thornburg Long/Short Equity Fund is to provide investors with a key long/short equity component within their portfolio that can produce equity index-like returns over the cycle driven by stock selection, but with much better risk characteristics than broad equity indices.”

The long/short portfolio has a very conventional construction:

“I’ll start with a brief overview of how we construct the portfolio. It’s a long/short equity fund, which simply means that we are trying to use fundamental bottom-up stock research to find stocks that we believe are trading at a discount to our calculation of intrinsic value, and those we’ll buy long. But also using our fundamental bottom-up stock research to try to find stocks that, based on our work, are overvalued, and those securities we’ll short, betting that the stock price wyuill move lower. We use fundamental bottom-up stock picking on both sides, with 30 to 40 stocks long and 30 to 40 stocks short.”

To get the complete details, read the entire interview in the Wall Street Transcript.