Key Takeaways
- • Sorengo Partnership Fund, a directional long/short equity hedge fund run by Theron de Ris, has annualised 12% net since its January 2017 inception (to February 2025), versus 11% for the MSCI ACWI TR USD index and 7% for the Russell 2000 TR, according to Opalesque.
- • The fund applies a counter-cyclical approach focused on supply-side capital cycles rather than demand, targeting businesses with strong balance sheets and management with skin in the game.
- • De Ris expects supply shocks from US border control and tariff policies to raise prices and possibly produce stagflation, which underpins an allocation he describes as long government chaos and 90% ex-US.
- • The portfolio holds roughly half its exposure in broader Europe and the U.K., with precious metals and a small but growing China position.
- • Sorengo has invested in coal on and off over five years and recently bought into Natural Resource Partners (NRP), a U.S. royalty company with 13 million acres of mineral rights on metallurgical coal assets.
Summary
According to Opalesque, Sorengo Partners Ltd, founded by American-born Theron de Ris in London in 2017 as Eschler Asset Management, runs a directional long/short equity strategy that seeks long-term capital deployment into resilient businesses in capital-constrained markets. The Sorengo Partnership Fund has annualised 12% net since its January 2017 inception through February 2025, compared with 11% for the MSCI ACWI TR USD index and 7% for the Russell 2000 TR. The publication notes the fund has had only one down year. The HFRI EH: Long/Short Directional Index was up 0.9% year-to-date to end-February and 9.6% over the last twelve months, per the article.
The manager's approach centres on capital cycles. De Ris argues in a LinkedIn post that while investors generally focus on demand, fluctuations in the supply of human and investment capital drive industry economics, cyclicality and long-term returns on capital. He contends that markets are fixated on a near-term demand shock from US federal spending cuts, whereas the more significant risk is supply shocks to labour and product markets from new border control and tariff policies, which could push prices higher. Over the longer term he sees potential for a supply-side boom from re-engineered supply chains, greater domestic investment and lower taxes, but in the interim he warns a supply shock could produce stagflation. These views inform an asset allocation that he describes as long government chaos and 90% ex-US.
De Ris told Opalesque that the positioning diversifies the portfolio, pointing to precious metals exposure and a small but growing China position, which he sees as offering supply-side improvements despite a prolonged bear market. About half the portfolio sits in broader Europe and the U.K., with a modest overweight to the U.K. where he sees lower valuations relative to the U.S.
On coal, the article notes Sorengo has invested on and off over five years in an industry that nearly went bankrupt about a decade ago due to low-cost U.S. natural gas, environmental regulation and slowing Chinese demand, before the pandemic. Citing the International Energy Agency, Opalesque reports global coal use rebounded to an estimated 8.77 billion tonnes in 2024, a record. De Ris argues the sector remains underinvested despite stable demand and coal's roughly one-third share of primary energy. Sorengo recently invested in Natural Resource Partners (NRP), a U.S. royalty company holding 13 million acres of mineral rights on metallurgical coal assets that supply the steel market. De Ris considers NRP's multiple low relative to its history and believes the share price is worth twice its current level.
De Ris is scheduled to join the Small Managers Big Alpha Episode 16 webinar on April 3, 2025, where he will discuss Sorengo and the planned launch of Zenith Alpha Management (ZAM), a multi-manager fund with a single performance fee and a high hurdle rate.
The manager's approach centres on capital cycles. De Ris argues in a LinkedIn post that while investors generally focus on demand, fluctuations in the supply of human and investment capital drive industry economics, cyclicality and long-term returns on capital. He contends that markets are fixated on a near-term demand shock from US federal spending cuts, whereas the more significant risk is supply shocks to labour and product markets from new border control and tariff policies, which could push prices higher. Over the longer term he sees potential for a supply-side boom from re-engineered supply chains, greater domestic investment and lower taxes, but in the interim he warns a supply shock could produce stagflation. These views inform an asset allocation that he describes as long government chaos and 90% ex-US.
De Ris told Opalesque that the positioning diversifies the portfolio, pointing to precious metals exposure and a small but growing China position, which he sees as offering supply-side improvements despite a prolonged bear market. About half the portfolio sits in broader Europe and the U.K., with a modest overweight to the U.K. where he sees lower valuations relative to the U.S.
On coal, the article notes Sorengo has invested on and off over five years in an industry that nearly went bankrupt about a decade ago due to low-cost U.S. natural gas, environmental regulation and slowing Chinese demand, before the pandemic. Citing the International Energy Agency, Opalesque reports global coal use rebounded to an estimated 8.77 billion tonnes in 2024, a record. De Ris argues the sector remains underinvested despite stable demand and coal's roughly one-third share of primary energy. Sorengo recently invested in Natural Resource Partners (NRP), a U.S. royalty company holding 13 million acres of mineral rights on metallurgical coal assets that supply the steel market. De Ris considers NRP's multiple low relative to its history and believes the share price is worth twice its current level.
De Ris is scheduled to join the Small Managers Big Alpha Episode 16 webinar on April 3, 2025, where he will discuss Sorengo and the planned launch of Zenith Alpha Management (ZAM), a multi-manager fund with a single performance fee and a high hurdle rate.
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