Spruce Point Capital Management

There were plenty of losers in 2022, as stocks plummeted and bond markets broke down in the face of rising interest rates.

The industrial sector rallied almost 14% in October, but short-sellers quickly increased their bets against the sector as prices rose. According to S&P Global Market Intelligence, investors boosted short interest in the sector to 3.08%. However, one well-known short-seller prefers consumer discretionary stocks over industrial names.

Activist short seller Spruce Point Capital Management bested the market downturn last year with a gain of 7.4 percent, according to a yearend letter to investors that Institutional Investor has received.

Despite all the public outcry against short sellers, a number of them survived 2021 just fine. A case in point is Ben Axler’s Spruce Point Capital, whose flagship hedge funds gained 21.4 percent on a net basis, according to a letter to investors.