mollyfamwatFor Jim Davis, a little-known hedge fund manager, 2020 is a decisive year for his career.
Former analyst for a large hedge fund manager.
Julian Robertson Jr.
managed $675 million at his Woodson Capital Management at the beginning of the year. At the end of November, after a bet against retailers and e-commerce companies, he made a lecherous bet. Turnover increased by more than 100% until October and growth in November also exceeded 90%.
Hedge fund manager William Ackman saw its profit increase by 62.8% in the year to November.
Photo:
Andrew Harnick/Presse Associée
Mr. Davis, 40 years old, is not alone. It was a record year for hedge funds betting on and against shares. Two of the biggest names in the industry, William Ackman and Chris Hansen, skilfully managed to control the market massacre and subsequent recovery, with profits of 62.8% and 48% respectively.
For the year ending November, hedge funds selecting shares have outperformed the S&P 500 as a whole by 11.9% since 2010, according to data provider HFR. Their strong performance in 2020 has partially wiped out their undervaluation against a portfolio of equities and bonds over one, three, five and ten years, according to
The Goldman Sachs Group Inc.
Hedge funds make a strong comeback, said Kieran Cavanna, whose New York office of Old Farm partners invests $350 million, primarily in selecting hedge fund securities for its clients.
Despite the comeback, a lot of pressure remains. Customers have less patience with poor performance after years of high costs and low returns. Interest from potential investors who fuelled the boom in the sector before the financial crisis has shifted to private equity and venture capital.
The funds that did well in 2020 gambled on speeding up e-commerce because people lived and worked remotely, and then quickly rebuilt commerce by focusing on restaurants, hotels and travel. Hedge funds have also benefited from increased trading by individual investors, which has led to greater volatility in share prices and therefore profit opportunities. The low interest rates also stimulated the stock market as a whole.
For Woodson, which won 15% in March while the S&P 500 lost 12.5%, existing bets that physical stores would suffer while e-commerce flourished helped. How to acquire an interest in a fitness company
Platoon Interactive Inc..,
which has risen by over 300% this year to November.
Here are some other hedge fund managers who have had successful years, based on interviews with clients and other people who know the companies well:
Glen Kaher bet against travel agents that e-commerce would flourish.
Photo:
Victor J. Bloomberg News
Light Street Capital Management
Palo Alto, California.
Glen Kacher, 49, started researching the new coronavirus at the beginning of March, after learning how fast it spreads on cruise ships. He made a series of bets against travel-related companies, including hotels and airlines, realising 10% in March. He quickly built on companies such as the Singapore based online furniture trader Wayfair, Sea Ltd. and an e-commerce platform.
Shopify Inc,
Companies whose share prices skyrocketed because people stayed at home and worked from there. As a result of the relocation, Light Street grew 46.8% until November, bringing assets to USD 2.7 billion.
Daniel Sandheim, of D1 Capital Partners, has good bets on Snowflake and other listed companies, as well as on minted travel stocks.
Photo:
Brendan McDermid/Reuters
D1 Capital company
New York
Productivity premiums for private companies
Daniel Sandheim,
Former Viking Global Investment Director, 43, and NBA minority owner Charlotte Hornets. It won 54.1% for D1 until November. Three of its private equity investments in Snowflake Inc. Software, a video game software company.
Unity Software Inc.
and the dialysis association
Outset Medical Inc.
-is open to the public this year. It also helped D1 to become a major investor in the private restaurant company Instacart Inc. that grew in value. Mr Sundheim also bought shares in the travel and fatal aviation sector, which he believes will ultimately benefit from the unmet demand for experience, particularly from airlines.
Airbus SE
and amusement park manager Walt
Disney Co.
D1’s assets reached $20 billion.
Charles Chase Coleman had a portfolio of companies in e-commerce, online payments and cloud computing when the pandemic began. Increased to 37% in November.
Photo:
Amanda L. Gordon/Bloomberg News.
Global tiger management
New York
This year’s focus on the opportunities and disruptions created by the Internet has borne fruit for Charles Chase Coleman, 45, of Tiger, who had a portfolio of e-commerce giants, online payment companies and businesses in the cloud when the pandemic struck. It increased by 37% in November. Tiger has its existing shareholdings in companies such as
Microsoft Corporation.
Cyber security society
CrowdStrike Holdings Inc.
and the company dustwage giant
Salesforce.com Inc.
Some technology investors have expressed concerns about the bubble, but Tiger suggested this in a letter to 30-year-old customers. October that it’s too early to sell high-growth companies. An old Chinese investor also bought
JD.com Inc.
и
Alibaba Group Holding Ltd.
in the belief that China will do better with Covid-19 than the United States and Europe because of its political system and previous experience with viruses. The biggest winner was Homemade Sunshine.
Sunrun Inc.
The company, which also manages private equity funds, had $48 billion in assets at the end of November.
Thematic partners
London
The theme decreased by 12% until September, but the 38% increase in November changed all that. The main reason is the discovery by the Frenchman Patrick Degors, 51, of a little-known biotech company called Theleme.
Moderna Inc.
He found it while looking for a cure for his wife’s terminal cancer. This year, Moderna developed the U.S. approved vaccine Covid-19; stocks increased by 680% until November. Between November and November, Theleme rose by 20.6%, bringing its assets to USD 3.5 billion.
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Do you think the equity hedge funds will continue to do well in 2021? If so, why? Take part in the discussion below.
Asset management
Boston
Gavin Baker’s new technology-oriented hedge fund took a big gamble in March on payment company Square Inc. and other companies that the former portfolio manager of Fidelity Investments said benefit from social distancing. But afraid of the ever-increasing price of technology and confident in current immunizations, Baker, 44, reduced some of his most expensive technology companies in the summer for strikes in stores and travel agencies that he thought would benefit when the economy picked up again. The roar of the 1920s followed World War I and the Spanish flu, Baker twittered in November. This strategy yielded 58% in November, almost tripling assets to USD 1.2 billion.
Global airspace management
New York
Former Third Point analyst Jamie Stern, 33, likes to invest and bet against troublemakers. Multi-year bets on bricks and mortar, cable and energy retailers helped Skye protect itself from the March losses, while an existing stake in Microsoft, Skye’s largest position, helped increase profits. In addition, it has secured the subsequent economic recovery through the purchase of Disney shares, as well as
Uber Technologies Inc.
It lost only 1.6% in March and has risen 63.8% since November, bringing assets to USD 3.2 billion.
Email Juliette Chang at [email protected].
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