Money managers for the ultra-wealthy dumped beaten-down technology stocks during the fourth quarter, right before the market rallied in 2023, while their hedge fund counterparts took a different tack.
(Bloomberg) — Money managers for the ultra-wealthy dumped beaten-down technology stocks during the fourth quarter, right before the market rallied in 2023, while their hedge fund counterparts took a different tack.
Both Iconiq Capital and the investment firm for the Walton family’s fortune sold shares of cloud-computing company Snowflake Inc., which surged 20% this year through Tuesday after a steep slide in 2022. Stan Druckenmiller’s Duquesne Family Office also exited Microsoft Corp. and Amazon.com Inc. in the fourth quarter, according to a regulatory filing.Â
By contrast, some hedge funds dialed up their bets on the sector. Lone Pine Capital boosted its Microsoft stake by 23%. The stock is also the biggest holding of Tiger Global Management. Meanwhile, Seth Klarman’s Baupost Group more than tripled its ownership of Amazon.
Microsoft and Amazon are up 13% and 19%, respectively, after losing 29% and 50% last year.Â
Several so-called Tiger Cubs — hedge funds with ties to Julian Robertson’s Tiger Management — are heavily skewed toward tech stocks and posted crushing losses last year. Tiger Global’s hedge fund plunged 56%, Light Street Capital Management’s lost 54%, Lone Pine Capital dropped 36%, and Maverick fell 28%.Â
The tech-heavy Nasdaq Composite Index, which sank 33% in 2022, rallied 14% this year through Tuesday, after a 10.7% gain in January. Still, some large tech-focused hedge funds have trailed the index through January.Â
Druckenmiller, 69, made at least one prescient tech bet: Nvidia Corp., which now makes up about 4% of Duquesne’s $2 billion US equity portfolio. That’s proven to be a savvy wager given the craze around artificial intelligence and ChatGPT. Nvidia, seen as a benefactor of the rise of AI, has rallied 57% this year.
Tuesday was the deadline for thousands of institutional investors, including hedge funds, pension funds and endowments, to report certain US equity holdings to the Securities and Exchange Commission through quarterly 13F filings.
For TOPLive blog coverage of 13F disclosures, click here
Other highlights:
- Turmoil in crypto markets continued to reverberate. Soros Fund Management disclosed a bet against Silvergate Capital Corp., a bank under scrutiny for its ties to disgraced crypto entrepreneur Sam Bankman-Fried’s bankrupt business empire. Iconiq cut its stake in Robinhood Markets Inc..
- Both firms had connections of their own to the FTX saga: Iconiq was one of the investment firms that pitched into FTX funding rounds, and months before FTX’s collapse, Bankman-Fried took a more than 7% stake in Robinhood, which the brokerage is seeking to buy back.
- Bonds are back: Elliott Investment Management and Soros Fund Management both disclosed positions in corporate-bond exchange-traded funds during the fourth quarter. Elliott disclosed a position in HYG, a high-yield corporate bond ETF. And Soros Fund Management purchased about $255 million worth of LQD.
–With assistance from Miles Weiss.
(Updates with Tiger Cubs in fifth paragraph, Nasdaq performance in sixth.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.