After a challenging second quarter, the 14B Parsec Fund is now up 5.64% year to date, versus the S&P 500's 15.29% gain and the MSCI World Index's 12.04% return,.
For 2023, the fund returned an impressive 65.58% following a 26% for the fourth quarter. The S&P 500 returned 11.68% in the fourth quarter and 26.26% for 2023, while the MSCI World returned 11.53% and 24.44%, respectively.
The 14B fund is a fundamental long/ short equity fund that seeks opportunistic allocations to event-driven strategies, investing mostly in equities, derivatives, special situations and arbitrage opportunities believed to be trading at "meaningful discrepancies to fair value."
The fund looks for mispriced securities with a margin of safety, grouping its holdings as fundamental or event driven. The 14B fund was spun off from another KG Funds in 2022 and is run by Ilya Zaides, Kevin Butler, Bryan Gleason, and Anastasia Sharipov.
Market euphoria and shorts
In their 2023 letter to investors, and recent June performance stat sheet both of which were obtained by Hedge Fund Alpha, the 14B team recalled the combination of COVID-19 and the end of zero interest rates globally, both of which drove major changes to the financial markets in 2023.