LS Opportunity Fund (LSOFX)
By David Snowball
Objective and strategy
LS Opportunity Fund pursues three goals: preserving capital, delivering above-market returns and managing volatility. “The secret,” says manager John Gillespie, “is to avoid large losses.” They invest, both long and short, in individual stocks; they do not short “the market,” they don’t use esoteric options and they don’t typically use ETFs. They normally will have 20-40 short positions and 50-70 long ones. The long portfolio is both all-cap and value-oriented, both of which are fairly rare. The short portfolio targets firms with weak or deteriorating fundamentals and unattractive valuations.
Long Short Advisors of Philadelphia (LSA) launched the fund in 2010 and, after a solid five-year run with a different sub-adviser, brought in Prospector Partners in May 2015 to manage the portfolio. Prospector Partners, which is headquartered in Guilford, CT, was founded in 1997 by John D. Gillespie. Prospector defines itself as a value investor with a distinctive emphasis on investing from a credit perspective. They also manage institutional private funds and separate accounts, along with their two Prospector funds. Prospector manages about $740 million.
John D. Gillespie, Kevin O’Brien, and Jason Kish. Mr. Gillespie is one of Prospector’s founders and its president. He has managed the fund since May 2015. From 1986-1997, Mr. Gillespie was with T. Rowe Price where, among other things, he managed the Growth Stock Fund and New Age Media Fund (originally a closed-end fund that morphed into Media & Telecommunications, now called Communications & Technology Fund). He also serves on the Board of Trustees for Bates College, an alma mater. Mr. O’Brien has been a portfolio manager at Prospector since 2003. Before joining Prospector he spent seven years with Neuberger Berman, rising from analyst to managing director, and several years with White Mountains Advisors. He earned the Chartered Financial Analyst designation in 1995. Mr. Kish has been with the firm for 20 years. He’s a graduate of Providence College, received his Certified Public Accountant designation in 2000 and his Chartered Financial Analyst designation in 2004. The CFA designation is a significant predictor of manager performance. The team is supported by four analysts.