NS Capital Partners, launched in February 2006, is a market neutral equity hedge fund, focused on the utility industry and related ancillary sectors. The partnership targets a return 2-3x the risk-free rate over a 3 year period, while minimizing volatility and correlation to market indices. The utility sector provides significant alpha generation opportunity due to frequent valuation inefficiencies as a result of undercoverage/neglect by institutions, heavy regulation, and rising industry complexity. The investment process is driven by bottom-up fundamental research that emphasizes proprietary information sources. Exposure is typically <15% Net Long or Short which results in a risk/reward profile driven by individual stock pricing, not macro market calls. The primary focus is capitalizing on valuation inefficiencies between individual utilities and groups of utilities. The strategy also seeks to capitalize on shorter-term event-driven trading opportunities.
The fund primarily seeks investments in core industries (electricity, natural gas & water utilities), and selectively evaluates opportunities in ancillary industries
(oil/gas/coal, engineering & construction and electric equipment).