A new hedge fund with one of the biggest debuts of 2018 is shorting Adidas in a trade worth $243 million
- D1 Capital Partners placed a "rare" short bet worth about €216 million ($243 million) against Adidas.
- While the stock is near six-month highs, Adidas is facing more competition.
- D1 Capital, led by Daniel Sundheim, was also active in shorting UK companies last month.
D1 Capital Partners is betting against German athletic brand Adidas, placing a "rare" bet worth about €216 million ($243 million) that its shares will go down.
The New York hedge fund, led by Daniel Sundheim, jumped on the scene with a huge debut only last year, reportedly raising $5 billion. D1 revealed the Adidas position in a March 6 filing.
It's an unusually big short, said research firm Breakout Point, which said in an email: "We have not seen anybody with a big short in Adidas since Ray Dalio's Bridgewater shorted them about a year ago." Dalio's bet against Adidas back then was a stunning $339 million.
While the stock is near six-month highs, the shoe space is getting more crowded. Over the past few years, investors have poured about $170 million into shoe start-ups.
D1 was also active in shorting UK companies last month. Three of the fund's five big EU shorts are in UK: Publisher Pearson, Cineworld, and Royal Mail.
D1's position in Pearson's makes up about 1.6% of the stock, the biggest short holding among all hedge funds in that name, "which is rare for us to see for a newcomer," Breakout Point said.
A D1 spokesperson in New York didn't immediately return a call seeking comment.
Sundheim earned a reputation as "a savvy stock picker" while at the $32 billion fund Viking Global Investors. The Wall Street Journal in January named the fund as one to watch in 2019, saying at the time: "People who have invested in D1 say they are making a long-term, multiyear bet on Mr. Sundheim."
Unlike in the US, some European regulators require investors to disclose short positions when they exceed a certain percentage of the stock.
