This Is What Hedge Funds Bought And Sold In Q4: 13F Summary

A funny thing happened right before hibh-beta tech stocks set off on a torrid, record-breaking January meltup: not only did hedge funds dump most of these beleaguered names, they also shorted them in record quantities (something which we correctly predicted would lead to the frenzied short squeeze that carried over into February), and nobody took the wrong side of that trade more than family offices for the ultra-wealthy, who as we learned in today’s 13F barrage sold tech stocks during the fourth quarter right before the market rallied in 2023.

Some examples: according to Bloomberg, both Iconiq Capital and the investment firm for the Walton family’s fortune sold shares of cloud-computing company Snowflake, which has surged 20% this year after a steep slide in 2022. Stan Druckenmiller’s Duquesne Family Office also exited Microsoft in the fourth quarter, right before the tech giant gained 13% since the start of January, after falling 29% last year. Druckenmiller also exited Amazon.com after initiating the position in the third quarter; Glenview and Whale Rock also dumped the stock. AMZN fell 50% in 2022 but is up 19% so far this year.

Not everyone was selling, of course: some hedge funds, those who had been forced to liquidate their tech holdings earlier, were smart enough to dial up their bets on the sector in the fourth quarter. Lone Pine Capital boosted its Microsoft stake by 23%. The stock was also the biggest holding of Tiger Global Management (although whatever you do at home kids, don’t try to replicate anything Tiger Global does). Meanwhile, like a true value investor, Seth Klarman’s Baupost Group more than tripled its Amazon stake; while Tiger Cub Lone Pine boosted its position by 44%.

That said, the iconic Druckenmiller didn’t liquidate his entire tech book and made at least one smart tech bet: Nvidia, which according to Bloomberg now makes up about 4% of Duquesne’s $2 billion US equity portfolio. Nvidia, seen as a benefactor of the rise of AI, has rallied 57% this year. It remains to be seen if Nvidia – which two years ago soared when it was viewed as the benefactor of crypto mining – will also crater once the AI craze is gone and when people tire of trying to jailbrake the woke ChatGPT.

Here are some of the other findings from the latest volley of 13F reports, as compiled by Bloomberg:

• Bonds are back: Elliott 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.
• Glen Kacher’s Light Street exited Tesla – right before the stock doubled – and healthcare platform GoodRx Holdings Inc. The fund bought shares of AMD valued at $22.3 million and Netflix Inc. valued at $19.3 million.
• Harvard University’s endowment is backtracking on educational services company Laureate Education. After starting a position in the company last quarter, it exited its entire stake, selling all 101,800 shares.  The school continued to increase its stake in Grab Holdings by about 40%, snapping up $3.7 million more shares of the company, making it the endowment’s fourth-largest US holding.
• Yale University’s endowment continued to increase its existing position in Procept BioRobots after starting a position in the company last quarter. The school also hit the reverse button on oil and gas company Riley Exploration Permian after starting a new position last quarter. Yale kept its two other holdings, in Vanguard and iShares ETFs, unchanged.
• In was a boring quarter for Berkshire which trimmed some of its financial holdings, reducing its shares in U.S. Bancorp, Bank of New York Mellon and Ally Financial; it also slashed its recent brand new stake in Taiwan Semi (more here).
• Einhorn’s Greenlight Capital added Tenet Healthcare to its disclosed investments and exited Intel in the fourth quarter; it added to its holdings in Kyndryl Holdings and decreased its stake in Resideo Technologies. Green Brick Partners was the biggest holding, representing 28% of disclosed assets
• Soroban exited Yum! Brands Inc. from its disclosed investments and boosted CSX Corp. in the fourth quarter, it also decreased its stake in Lowe’s. CSX Corp. was the biggest holding, representing 22% of disclosed assets.
• Glenview added Universal Health Services Class B to its disclosed investments and exited Amazon.com Inc. It also decreased its stake in Aptiv Plc; Cigna Corp. was the biggest holding, representing 15% of disclosed assets
• Maverick Capital’s 13F revealed a fund in turmoil: Tiger Cub Lee Ainslie added 122 new buys, though most of the new positions were small, and exited 90 previously established positions. His biggest addition was 1.4 million shares in Catalent Inc., a company that provides delivery technologies and development solutions for drugs, biologics and consumer health products. The firm also started a new position Credo Technology, snapping up 1.06 million shares. On the other hand, it liquidated its entire stake in Carvana, selling 735,710 shares. Maverick lost around 30% last year.
• Elliott Investment Management LP added IShares iBoxx High Yield Corporate Bond ETF to its disclosed investments and boosted Pinterest Inc. Class A in the fourth quarter, according to a 13F analysis by Bloomberg.
• Troubled crypto bank Silvergate, which is also the most shorted Russell name with two thirds of the float short, saw several brand name hedge funds open new positions in the 4th quarter, at the same time as Soros Fund Management took a modest levered bet in the form of SI puts (more here).
• Icahn Enterprises LP boosted Icahn Enterprises LP to its disclosed investments and reduced Cheniere Energy in the fourth quarter; Icahn Enterprises LP was the biggest holding, representing 70% of disclosed assets
• David Tepper’s Appaloosa Management sold 300,000 shares of Meta Platforms during the fourth quarter; the stock represented about 5% of Appaloosa’s $1.3 billion US equity portfolio as of the fourth quarter. Appaloosa added new positions in Walt Disney. Caesars Entertainment and Aptiv during Q4. Judging by recent events, Tepper is most likely out of Disney already. Tepper also added to holdings in HCA Healthcare; Constellation Energy was Appaloosa’s biggest holding, representing 15% of disclosed assets
• Viking Global increased its stakes in BioMarin Pharma and UnitedHealth Group. Viking outperformed rivals last year thanks to bets on health-care stocks, which comprised about one-third of its portfolio at the end of the year. Its hedge fund ended the year down 2.4%.
• WIT, the investment firm that manages the Walton family’s fortune continued to be a fan of exchange-traded funds. WIT LLC, which stands for the Walton Investment Team, has a $3.6 billion US equity portfolio that’s mostly comprised of low-cost ETFs (because, of course). WIT also continues to bet on emerging markets. Its biggest holding is the $73.5 billion Vanguard FTSE Emerging Markets ETF. WIT threw in the towel on Snowflake, the cloud computing company, and Verve Therapeutics, a genetic medicines company, during the fourth quarter

More to come.