Cooper Creek Presents Short Thesis for This Troubled Home Builder With Alleged “Accounting Shenanigans”

Cooper Creek Partners returned 2.9% for the third quarter, versus 12.4% for the Russell 2000 and 8.1% for the S&P 500. The fund averaged net exposure of 14% during the quarter. Over the last 12 months, Cooper Creek has had an unusually rough run and returned -15.5% with an average of 9.6% net long exposure and a beta of 0.21 and correlation to the Russell 2000 of 0.37%.

Over the last 36 months, the fund posted an annualized return of 7.1%, while over the last five years, its annualized return has been 14.5%. Since its inception, it has generated an annualized return of 10%. Assets under management as of Oct. 1 stand at $2.24 billion across the firm, including $1.53 billion in hedged products. The fund remains closed to new investors.

Among other topics, Cooper Creek highlighted a short in a homebuilder company.

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Speculation in small caps

In his Q3 letter to investors, which was obtained by Hedge Fund Alpha, Cooper Creek's founder Robert Schwartz noted that Q3 brought an acceleration and expansion of the rally that started in the middle of the year. He said investors generally saw the surge in small caps as optimism that a soft landing is on tap alongside benefits from lower interest rates.