Three shorts and a long: The big investor calls at this year’s Sohn London conference
Hedge funds weighed in with short bets against a location tracking app, a U.S. real estate investment trust and a Swedish medical technology stock at this year’s Sohn London conference. Lombardi Capital founder Igor Kryca, meanwhile, who began his career at U.S. Treasury Secretary Scott Bessent’s hedge fund, went long on a German brakes manufacturer. Gotham City Research and General Industrial Partners unveiled a short position in Iron Mountain , a U.S. REIT whose main business is paper storage. In the past four years, Iron Mountain — which has a market value of about $26 billion — has shifted its focus to the data center sector, a move which Gotham City said has incurred “significant credit risk.” Presenting the idea at this year’s Sohn London event on Wednesday, Daniel Yu, CEO of Gotham City Research and co-founder of London-based hedge fund General Industrial Partners, and Cyrus de Weck, co-founder of General Industrial Partners, described the core business as “a melting ice cube.” “So what did they do about it? They bought data centers with other people’s money,” Yu said. IRM 6M mountain Iron Mountain. Yu noted how the company has spent $6 billion on data center investments, with its share price outperforming the Magnificent Seven, but said the company has been massively aggressive” in its EBITDA margins. EBITDA refers to earnings before interest, taxes, depreciation, and amortization. Overall, the company faces a downside of almost 80%, according to Yu and de Weck. “This is a hail mary pass for a dying business,” Yu said. Iron Mountain did not respond to a request for comment. Meanwhile, Brummer & Partners, a Stockholm-headquartered multi-strategy hedge fund, holds a negative wager in Bonesupport AG , a Swedish medical technology name which specializes in synthetic bone-filling solutions. Mattias Thärn, who manages a fundamental long/short equity portfolio at Brummer, suggested that Bonesupport has used selective studies and has “cherrypicked” the results of its treatments since it became public. He also criticized, among other things, management disclosures. “You have to ask yourself why companies do this? Who gains from this? It all comes down, in my personal opinion, to management incentives and individual decisions.” 2B4-FF 6M mountain Bonesupport AG. Thärn said the Stockholm-listed medtech name also hopes to expand into open trauma and spine treatments, both larger markets than its current sector, a move he believes will ultimately prove unsuccessful. In response, Bonesupport’s CEO Torbjörn Sköld said concerns about cash flow and sales collapse have been disproven by the company’s “continuous strong financial performance” in line with guidance. He said the company has already addressed Brummer’s statements, many of which he said “originate in clear misinterpretations.” Sköld said Bonesupport’s CERAMENT G synthetic bone graft substitute is Food and Drug Administration-approved, involving comprehensive data from 430 patients with a mean follow-up of four years, with the FDA itself analyzing the data and confirming statistical significance on key outcomes. “Our clinical studies follow international scientific standards,” Sköld told CNBC in an email. On the company’s planned expansion into open trauma and spine treatment, he said: “Our track record demonstrates our ability to execute successfully in new indications.” Monetizing anxiety Elsewhere, Life360 Inc. , a location-sharing app with a market capitalization of almost $6 billion, “monetizes anxiety” among attentive parents with school-age children, according to Katamaran Capital founder and chief investment officer Priya Kodeeswaran. Katamaran — which trades a market-neutral long/short equity strategy which aims to generate alpha from changes and catalysts arising from earnings dispersion — is short the company, which publicly debuted in Australia in 2019 before launched a dual listing on the Nasdaq in 2024. Life360’s share price had been a “stonker,” but now the company’s stock faces a potential 40% downside, according to Kodeeswaran. In his investment pitch, Kodeeswaran criticized its subscriptions approach, which is heavily dependent on its mostly-U.S. based paying subscribers, while conversions among international users are low. It also faces competition from similar location-tracking features on Google and Apple operation systems, which are free. “The business model risk is actually increasing,” he told attendees. Life360 did not respond to an email request for comment. LIF 6M mountain Life360. On the long side, Lombardi Capital is investing in Knorr-Bremse , which builds braking systems, door components and various other components for both rail and commercial vehicles. Lombardi founder Igor Kryca said the Munich-headquartered group benefits from both a best-in-class rail business in its RVS division, as well as a broader transformation story under CEO Marc Llistosella. Knorr-Bremse is the “undisputed leader in passenger rail braking systems,” according to Kryca, who said that about half of all trains worldwide are kitted out with Knorr’s brakes. Predicting that the share price could double from its current level, he also noted that the company will be a direct beneficiary of Germany’s imminent infrastructure spend, where some 100 billion euros ($115.2 billion) have been earmarked for rail. Kryca began his career 2000 as an analyst at Bessent Capital, before moving to quant hedge fund behemoth Renaissance Technologies. He later returned to work for Scott Bessent at Soros Fund Management in 2014, running a $2 billion European long/short equity portfolio. KBXA-FF 6M mountain Knorr-Bremse.
