Fahmi Quadir, the founder and chief investment officer of Safkhet Capital LP and an expert short seller, never wanted to work at a hedge fund.
So how did the 28-year-old become such a successful short seller that she started her own fund?
Some people are born into a certain industry.
Many embrace this “gift,” others have it imposed on them.
Quadir certainly falls into the latter category.
“When I started out, I wasn’t at all interested in working on Wall Street,” says Quadir, 28.
I never wanted to work at a hedge fund.
Growing up, my interests were never unified — the fund industry was never an area of consideration given my political views and ideology.”
However, Quadir now has a permanent home in the heart of the New York fund scene, the Dominique Hotel in lower Manhattan.
Quadir’s rise in the investment industry is not typical.
She was born on Long Island to Bangladeshi parents.
She is the kind of studious person who aspires to enter academia.
She studied math and biology at Harvey Mudd College in California, and her plan to pursue a doctorate seemed to be on track.
Her passion for research made her first fortune and everything changed during her pre-doctoral year.
Quadir applied for a fellowship at Deallus Consulting, which specializes in corporate intelligence for large pharmaceutical and biotech companies.
She only took the job so that she could earn some money before continuing her studies.
Deallus hired her to do investigative work — delving into companies to see how decisions are being made behind the scenes, whether there are potential crises, and where the “risk” lies.
Kadir says she’s pretty good at it, and she’s thrilled to get an inside scoop on the company while doing her research.
In the process, she also discovered many interesting facts.
Then, during a chance meeting at the National Museum of Mathematics in New York, Qadir’s life changed forever.
“I was introduced to someone who ran a long-term fund and, knowing my focus on health stocks, he decided I would be a natural short trader.”
That man was hedge fund manager Michael Krensavage, who was looking for someone to help his namesake hedge fund realize its idea of shorting the health care industry.
Kadir thus became a key member of a short-selling fund company.
Fortunately, she already had a target to bet against — Valeant.
Before that, she had smelled “corruption” at the drug company.
She is deeply suspicious of the company’s attempts to achieve high profit returns by buying pharmaceutical companies and raising the prices of their drugs to sky-high levels.
“I knew Valeant was already engaging in unethical and potentially fraudulent practices” — Fahmi Quadir Valeant had a reputation in the industry at the time.
But I knew that the company was already engaging in unethical and potentially fraudulent practices.
The pharmaceutical industry is a very mature industry and when someone tries to break the rules and release unusual numbers, then the company gives itself away.”
‘she said.
Valeant’s short trade was executed in June 2015 — when the stock was near its peak.
By the middle of that year, the Krensavage fund had a $30 million short position in the stock, or 10 percent of the fund’s total position.
It was a big bet at a time when the market was generally bullish on Valeant.
Between July 2015 and March 2016, Valeant’s stock price plummeted from $257 to $28, losing 90% of its value.
This short position also became the company’s biggest profit source in 2016.
Quadir and Krensavage were the clear winners of the deal.
She also became the subject of a Netflix documentary.
