Tech and Resource Investments Dominate at Sohn Montreal Conference

Hedge Fund Managers Gather in Montreal to Pitch Next Big Thing

Hedge fund managers and other investors are gathered at the Sohn Montreal investment conference, where they are pitching the next big thing. The conference has seen presentations on a range of topics, including artificial intelligence, biotech, and gold mining.

At the conference, Whale Rock Capital Management LLC founder and chief executive officer Alex Sacerdote made a prediction about Anthropic PBC, stating that he expects the company to be headed towards half a billion users. Sacerdote noted that Anthropic has jumped from 2 million users to 14 million daily active users quickly, and that the company has a significant runway for growth. Whale Rock was a "significant investor" in Anthropic's Series G round earlier this year.

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Sacerdote also highlighted the potential of Anthropic's Claude chatbot, stating that the company is "so early" in its development and that the first three years of AI were like a search engine "on steroids." He noted that the real prize is the enterprise market, which has not yet started to adopt AI.

StemPoint Capital LP pitched French biotech company Abivax SA as a potential M&A target. Chief Investment Officer and Managing Partner Michelle Ross noted that Abivax's drug obefazimod can be compared to Humira as a treatment that could be a "pipeline in a product for another company." Abivax shares plunged earlier this week after cancer cases in a crucial clinical trial for a bowel disease drug threw the French biotech's future into question. However, the stock was up as much as 16% Thursday in Paris on analysts saying the concerns over the trial were overdone.

Gold mining was another area of focus at the conference, with Toronto-based hedge fund Waratah Capital pitching Artemis Gold Inc. The mining company operates the Blackwater mine in British Columbia and has a long runway of growth, according to Brad Dunkley, chief investment officer and co-founder at Waratah. Dunkley noted that Artemis trades at a discount to comparable Canadian gold producers, despite having a large-scale asset in a top-tier jurisdiction, low operating costs, and fully funded growth.

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Dunkley added that the company's Blackwater mine combines three attributes that are rarely found together: a large-scale asset in a top-tier jurisdiction, low operating costs, and fully funded growth. He estimated that the mine could generate more than C$2 billion (US$1.4 billion) of annual free cash flow by 2029, while a re-rating toward peer valuation multiples could deliver upside of more than 50% from current levels.

Anthropic confidentially submitted draft paperwork for a public listing on Monday, potentially leapfrogging longtime rival OpenAI in the race toward a Wall Street debut as soon as this fall. Despite concerns that soaring valuations have created an AI bubble, Sacerdote dismissed comparisons to the dot-com era, noting that today's AI leaders are generating substantial profits and trade at far lower multiples.

The biggest threat to the sector is not economics but regulation, Sacerdote added, warning that governments could slow innovation if public fears surrounding AI translate into restrictive policies. He noted that Americans "don't seem to like AI" and that there is a lot of "not in my backyard" sentiment, but that this will not be able to stop the trend.

Private credit was also a topic of discussion at the conference, with Third Point's head of private credit, Christopher Taylor, arguing that the asset class remains strong. Taylor noted that concentration risk is a product of how platforms were built, not an indictment of the asset class itself, and that diversification among borrowers adds protection.

Country view Pembroke Management Ltd.'s founder and chair Jeffrey Tory noted that Canada has "lost its status among investors" due to significant outflows of capital over the last decade, which have led to compressed valuations and higher cost of capital. However, this has created a "Made in Canada" discount in many industries, which provides a greater margin of safety and opportunity.

Pembroke's founder and chair Jeffrey Tory also highlighted the potential of Calgary-based Black Diamond Group Ltd., which specializes in workforce accommodation and modular spaces in remote areas such as Alberta's oil sands. The company stands to benefit from demand in resources and higher spending in infrastructure, Tory said.

Yacov Arnopolin, a managing director and portfolio manager for emerging markets at Pacific Investment Management Company LLC, pitched a trade in Nigerian treasury bills. He noted that Africa's most populous country has "huge potential" as a large oil producer and a stable and appreciating currency in the naira. However, he acknowledged that the country has security risks with terrorism in the north.