Hedge Fund That Rose 147% Sees 2021 as ‘Great Year’ for Equities

(Bloomberg) -- Sonny Abrol’s Pond Image Capital LLC, a long-short fund, soared about 147% in 2020 -- and the former Deutsche Bank proprietary trader expects another positive year for U.S. equities in 2021.

“With the pandemic potentially ending and all the pent-up demand for travel and spending, 2021 will be a great year for stocks,” Abrol, the founder and chief investment officer, said in an interview.

Abrol made his money this year primarily by going long technology stocks and shorting service industries such as airlines, casinos and cruise lines. However, now that the world is gearing up for a rollout of effective Covid-19 vaccines, beaten down sectors in 2020 could outshine tech stocks next year.

To be sure, he isn’t turning negative on tech, rather he just doesn’t expect the group to outperform as much as this year. “It doesn’t mean I’m getting bearish on tech by any means. But after such a huge run in software and semi-conductor names, you could see them take a backseat and beaten down sectors start to do really well,” he said.

The Las Vegas-based hedge fund uses a hybrid of fundamental and proprietary technical indicators, as well as advanced options strategies to outperform the broader market. Abrol said that strategy led him to Inphi Corp., which he pitched at a sell-side conference in August and which recently agreed to a takeover offer from Marvell Technology Group Ltd. for $8.2 billion in cash.

The fund has about $50 million in assets under management, essentially all of it in U.S. equities and derivatives.

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