Green Ash Chanos Equity Long / Short

Chanos & Co is a global investment firm founded in 1985 by Jim Chanos, a well-known short seller with a track record of identifying fraudulent companies and other systemic short opportunities (e.g. Enron, Wirecard). The firm recently partnered with Green Ash Partners to launch a UCITS version of Chanos's equity long/short strategy, which has $350 million in total AUM as of September 2022. The fund targets short-based alpha opportunities globally, with a US bias, using a variable net approach to equity markets (+/-40% vs. an average of +20%) and gross exposure of less than 200%. The team employs a thorough bottom-up approach, grounded in forensic accounting analysis, with the goal of identifying mispriced short company ideas compared to intrinsic value. Short investments are typically divided into three categories: fraud, valuation (aggressive accounting, unsustainable business models, etc.), and thematic (e.g. commercial real estate). The final portfolio usually includes 30-60 short positions, which are "hedged" with an active long overlay (primarily index futures and sector ETFs). The short ideas are mostly implemented through a dynamic basket of options (buy OTM puts, write calls or call/put spreads) to generate asymmetric outcomes and capture downside alpha while protecting against upside losses. Chanos's proprietary signals (market regime, short-term alpha momentum, etc.) are among the key inputs that inform the fund's optimal net and gross levels for the strategy.