Far off the hedge fund world’s usual map is a small firm in Toronto, filling out the second floor of a tidy brown office tower, just above a pizzeria.
From that perch, Anson Funds and its 41-year-old leader, Moez Kassam, have been posting returns that are multiples of the industry norm. It’s also punching above its weight in controversies. Reddit boards and websites have sprung up to question the propriety of how it bets on the ups and downs of stocks. So too have lawsuits.
And now, Anson has an unwelcome distinction in a U.S. Justice Department inquiry examining the tactics used by short sellers: Of dozens of firms that Bloomberg has identified as being mentioned in prosecutors’ sweeping requests for information and communications, Anson is among a smaller number that have been subpoenaed directly, according to people familiar with the matter. Exactly what’s prompting that level of attention isn’t clear.
A Justice Department spokesman declined to comment. Kassam referred questions to a lawyer who offered no comment.
On the roster of money managers and stock researchers whose names have surfaced in connection with the U.S. inquiry, Anson stands out to Wall Streeters as one of the lesser-knowns—hardly on the same level as famous bears such as Muddy Waters, Kerrisdale Capital and Citron Research, whose blunt critiques of public companies have set off a number of market dramas.
But in Toronto’s investing scene, Kassam’s profile has been rising, and the firm he’s run since 2007 has been gaining momentum. In the past four years, Anson Funds has more than tripled assets under management beyond $1.5 billion. In each of the past two years, it’s posted returns of around 45%—lifting its average annual gain since inception to almost 16%. That’s more than three times the typical yearly return churned out by long-short funds in that period, according to Bloomberg hedge fund indexes.
Around Toronto, Kassam has cultivated the profile of an investing savant turned philanthropist, and he’s developed a powerful network. A few years after Toronto Life did a photo spread on his three-day wedding celebration, the magazine’s editor joined other business leaders on the board of his charity.
On Instagram, he posts prolifically under the username MunchingMoez to some 5,600 followers, chronicling his adventures in dining and society. Recent snapshots there show him celebrating a birthday with executives atop larger Canadian funds—K2’s Shawn Kimel and RP Investment Advisors’ Richard Pilosof—as well as TD Securities’ freshly retired head of markets, Moti Jungreis. Kassam often refers to his rotating cast of companions as “the crew.”
While Anson pitches itself as a relatively conservative long-short company, some attribute its winning performance to aggressive investment strategies that have proved legally contentious. The firm has been sued or countersued at least five times over a variety of allegations it engaged in deception—claims that Anson has vigorously denied. Plaintiffs include corporations that it’s bet against, a company shareholder and a short-selling researcher who went from collaborating with Anson to attacking it.
The thinking among Anson’s executives is that the firm attracts outsize criticism because it’s among relatively few hedge funds in Canada that take significant short positions, a realization that’s led it to emphasize long bets instead, according to a person with knowledge of the matter, who asked not to be named discussing internal conversations. It also blames the estranged researcher for stoking unwanted attention.
Shorting Cannabis
Anson is named for British Admiral George Anson, who rose to fame in the 18th Century by embarking on a perilous circumnavigation of the globe. Ships in his group were lost to the seas, but along the way he got rich by capturing a Spanish galleon laden with silver. The firm’s headquarters features a large wooden map tracing that four-year voyage, as well as one of Admiral Anson’s quotes: “Prudence, intrepidity and perseverance.” The firm is officially registered in the Cayman Islands and has an outpost in Dallas.
Being in Toronto has advantages. Several years ago, a stock bubble formed in Canada as investors bid up shares linked to its nascent cannabis industry. With banks reluctant to provide much support to the sector, Anson was among money managers that helped startups raise money. It also bet against them.