Key Takeaways:
- Fahmi Quadir is closing her short-only fund Safkhet Capital after a decade
- She is launching Safkhet Sentinel, an activist fund targeting South Korean companies
- More than two-thirds of the Kospi index trades below book value
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Quadir shifts from $85m short fund to Korea activist push
Fahmi Quadir, the short seller who brought down Wirecard, is flipping her playbook to hunt for activist opportunities in South Korea.
Fahmi Quadir, the short seller known as "the assassin" for bets that cratered Valeant Pharmaceuticals and Wirecard, is closing her short-only fund and launching an activist strategy targeting South Korean small-to-midcap companies. The 35-year-old American is shifting from a decade of betting against stocks to pushing for governance changes from within.
"I kind of felt like a hamster running on a wheel," Quadir said. "Because no matter what I did, no matter how good the ideas were, it was just too difficult to get out of the hole."
Quadir's Safkhet Capital, launched in 2018 with $6 million, peaked at $85 million in assets after her bet against Wirecard — the German payments processor that collapsed amid fraud allegations in 2020. But the sustained bull market eroded returns on her concentrated short positions, and she shuttered the fund last year, joining other prominent short sellers including Jim Chanos and Hindenburg Research's Nate Anderson who have retreated from the space. Her new vehicle, Safkhet Sentinel, will take long positions in Korean companies and push for governance improvements, board independence and share buybacks.
The shift comes as South Korea's government pushes a "corporate value-up program" to address the so-called Korean Discount, with tax breaks and a new stock index designed to steer investment toward shareholder-friendly companies. More than two-thirds of the Kospi index still trades below book value, according to the Wall Street Journal, creating what Quadir sees as a fertile hunting ground for activist investors. Even heavyweight activist Elliott Investment Management faced challenges there in 2015, when it failed to block a merger inside the Samsung group — a legal battle still playing out a decade later.
From Short Seller to Activist
Quadir built her reputation on forensic analysis of corporate malfeasance. Her successful bet against Valeant Pharmaceuticals — the poster child for drug-price gouging during the 2016 election — landed her a starring role on Netflix's "Dirty Money" docuseries. Her next big win, against Wirecard, netted her fund tens of millions of dollars. Many believe a female short seller in HBO's "Industry" is loosely based on her.
But the strategy came at a cost. In early 2020, a week after Quadir met with the FBI to hand over evidence against Wirecard, a masked assailant with brass knuckles punched her in the head as she walked her poodle in Manhattan. The attacker stole nothing, she said.
"She's had the living stuffing beaten out of her personally and professionally, and she's still around," said Marc Cohodes, a short seller who mentored Quadir and nicknamed her the assassin. "She just keeps coming back for more."
Korea's Value-Up Opportunity
Quadir plans to hedge her new venture with a broad basket of positions to avoid repeating the concentrated-bet mistakes of the past. She is hiring a team on the ground and plans to establish a Seoul office while keeping London as her home base. Her initial targets are small-to-midcap companies where she believes her expertise in forensic analysis can unlock value by pushing for independent boards, auditor changes and share buybacks.
"I'm not coming with a fixed menu," Quadir said. Above all, she is eager to avoid being perceived as a hostile actor. "I don't want to just be known as the girl who brings down Valeant or Wirecard," she said. "I don't want to be pigeonholed as the assassin."
The last time a prominent activist entered the Korean market at scale, Elliott Management's campaign against the Samsung C&T merger in 2015 ended in defeat despite a 15 percent premium on the offer price. The resulting legal dispute remains unresolved. Quadir's smaller, more targeted approach targeting companies with market capitalizations below the chaebol-dominated large-cap space may face less political resistance, though governance battles in Korea have historically been protracted affairs.
This article is for informational purposes only and does not constitute investment advice.
