Former Wall Street Short Seller Lahfemi Kadir Targets South Korean Stocks as New Investment Frontier

Lahfemi Kadir, a former Wall Street hedge fund manager known for her aggressive short-selling tactics and dubbed "The Assassin," is shifting her investment strategy. After a decade of profiting by betting against companies like fintech giant Wirecard and exposing corporate frauds featured in two Netflix documentaries, Kadir is now focusing on boosting stock prices. Based in London, she is preparing to launch her activist investment approach in South Korea this summer, aiming to identify undervalued companies in the Kospi index, where over two-thirds of stocks trade below book value despite a booming semiconductor market.

Kadir, 35, founded Safkhet Capital in 2018, a hedge fund that exclusively shorted companies she believed were fraudulent or poorly managed. While initially successful, her strategy struggled as the S&P 500 nearly tripled, forcing her to close the fund last year amid mounting losses and regulatory pressures on short sellers. She joins other prominent short sellers like Jim Chanos and Nate Anderson in retreating from the field. However, Kadir remains eager to apply her forensic analysis skills to promote positive corporate governance and shareholder value from within companies, a significant pivot from her previous approach.

South Korea presents a challenging environment for activist investors due to the dominance of family-controlled conglomerates known as chaebols, which have historically resisted external influence. Even major firms like Elliott Investment Management faced setbacks in their attempts to intervene. Kadir plans to establish a local team and office in Seoul, focusing on small and mid-sized firms that could benefit from governance reforms such as independent boards and share buybacks. She sees the current government initiatives aimed at reducing the "Korean discount" on stock valuations as a timely opportunity.

Kadir’s career began unexpectedly after a gap year led her from academic aspirations to consulting and then to hedge fund analysis. Her notable short against pharmaceutical company Valeant Pharmaceuticals in 2015, which spotlighted drug price hikes during the U.S. presidential campaign, brought her significant recognition. She also profited handsomely from exposing Wirecard’s fraud. Despite personal risks, including a violent attack in Manhattan in 2020, Kadir persevered. Now, she seeks to avoid being pigeonholed solely as a short seller and instead aims to be recognized for driving constructive change in corporate governance.

"I don’t want to be known just as the woman who took down Valeant or Wirecard," Kadir said. "I want to avoid being boxed in as ‘The Assassin.’" Her new venture, Safkhet Sentinel, will employ a diversified portfolio to mitigate past risks and capitalize on opportunities in South Korea’s evolving market.

Summary: Lahfemi Kadir, a former Wall Street short seller known as "The Assassin," is shifting her focus to activist investing in South Korea. After closing her short-only hedge fund, she plans to promote corporate governance reforms and unlock value in undervalued Korean stocks, launching her new initiative this summer from her London base.

Points: - Lahfemi Kadir, famed short seller, is pivoting to activist investing in South Korea. - She closed her short-only hedge fund Safkhet Capital last year amid market challenges. - South Korea’s chaebols pose a tough environment for activist investors. - Kadir plans to build a local team and office in Seoul to target undervalued firms. - Her new fund, Safkhet Sentinel, will use diversified strategies to boost stock prices. - Kadir aims to be known for constructive change, not just short selling.

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