work out what the company does,  check management are allocating capital properly and make sure the shares aren’t overvalued.
Bronte often buys companies that make a part of something bigger, such as Rolls-Royce Holdings Plc, which develops jet engines. The fund’s also betting that phone companies such as Verizon Communications Inc. will be able to raise prices as mobile-data usage surges more quickly than the telecommunications industry can add capacity.

“Going long is really, really hard,” Hempton said. “Everyone seems to think it’s easy. It isn’t. It’s not easy because you don’t know about the future,” he said. “On the shorts we are right almost all the time. On the longs we are not. Shorts are just easy but the risk management is hard and the timing is hard.”

Wrong Bet

At a hedge fund conference in Hong Kong earlier this year, Hempton presented a case of a short that went wrong, a Canadian gold miner where he said his thesis fell apart even after intricate research. On timing, Valeant doubled after he first bet against the firm, and even on the way down he says he missed some of the profits. While Bronte counts millionaire Australian Prime Minister Malcolm Turnbull among its investors, the hedge fund has found it hard to attract institutional money.

Bronte’s separately managed accounts for U.S. clients delivered a 32 percent annual gain from 2009 to June 2014. The Amalthea Fund for Australian investors made an annual return of 15 percent in the three years through May. The fund rose 5.1 percent in May after two months of declines.

Unique View

Hempton “doesn’t subscribe to or use broker research at all,” said Daniel Liptak of Melbourne-based Arkaba Advisors, which helps clients with investments in alternative assets. He lives “outside of the time zones of most of the other large, global hedge funds. He has an incredible gift of memory of facts and figures. All those three things combine to provide quite a unique view of the world. It doesn’t mean he’s always right.”

Anton Tagliaferro, founder of $4.5 billion money manager Investors Mutual Ltd., says Hempton is intelligent, tense and a little bit odd. On the last point, Hempton agrees. He says he’s always been an outsider, preferring pursuits like hiking and cross-country skiing, and his disagreement with Ackman is the latest in a history of picking fights that dates back to organizing environmental protests in Sydney in the late 1980s.

“I am eccentric,” Hempton said. “My wife thinks I’m weird. My son thinks I’m weird,” he said. “On the surf beach it doesn’t matter that I’ve made some enemies. It genuinely doesn’t matter. It would be nicer if people thought highly of me than not highly of me but it really doesn’t matter.”

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