Lee Ainslie III’s Maverick Capital’s main hedge fund is back in the black.
The Tiger Cub’s Maverick Fund posted a 22 percent gain in the second quarter, thanks in part to strong gains in June, according to a person familiar with the matter. The fund is now up 6 percent for the year, the person said. It was down 4.7 percent at the end of May.
Maverick is the latest long-short hedge fund — particularly one with roots to Julian Robertson Jr.’s Tiger Management — that has rebounded into positive territory after reporting losses during the market meltdown in the first quarter. Other Tiger Cubs that have done so include O. Andreas Halvorsen’s Viking Global Investors and Stephen Mandel’s Lone Pine Capital.
For example, Viking Global Equities posted an 11.2 percent gain in the second quarter, bringing returns for the year to 11 percent, according to an investor. The firm’s Viking Long Fund surged 23.8 percent in the three months through June for a 4.6 percent gain in the first half of 2020, the investor said. Viking Global Opportunities, meanwhile, returned 15.4 percent for the second quarter and is now up a solid 9.5 percent for the year.
In another rebound, Lone Pine Capital’s long-short fund, Lone Cypress, rose 13 percent in the three months through June, bringing it up 6 percent for the year, Institutional Investor reported earlier this month. The Tiger Cub’s long-only fund, Lone Cascade, posted a huge 35 percent gain in the second quarter, a person with knowledge of the matter told II at the time. The person said the fund is up 10 percent for the first half of this year after losing 18 percent in the first quarter.
Hedge Fund Research recently reported that nearly half of all hedge funds in its database made money in the first six months of this year, with the top 25 percent posting an average return of 14.8 percent. However, we don’t know which — or if any — Tiger Cubs, Seeds or Grandcubs are among the top-performing hedge funds in the HFR database.
Maverick’s long-short fund benefited in part from a big short position in Wirecard, according to a person familiar with the results. II earlier reported Maverick was one among several high-profile hedge funds to hold short positions in the German fintech company.
The hedge fund firm’s long bets also came roaring back in the second quarter. Unlike other top performing Tiger-related funds and long-short managers, Maverick’s largest U.S. longs are not the technology and internet stocks most popular with hedge funds.
Chemical giant DuPont de Nemours, for example, remained Maverick’s largest long at the end of the first quarter after boosting its position by 42 percent, according to its most recent 13F regulatory filing. Health insurance giant Humana became its second largest U.S. long after the firm doubled its position in the first quarter.
DuPont’s shares soared about 56 percent in the second quarter, while Humana’s stock price jumped about 23 percent.
Chinese e-commerce giant Alibaba Group Holding was Maverick’s third largest long at the end of the first quarter, while Google parent Alphabet ranked fourth even though Maverick slashed its stake in the same three-month period.
Maverick’s two main long-only funds performed well in the second quarter, but remained in the red for the year through June, according to the person familiar with the matter. Maverick Long, which rose 27 percent in the second quarter, remains down 10 percent for the half of 2020, the person said. Maverick Long Enhanced surged 29 percent for the second quarter, cutting its loss for the year to just 2 percent.
As for Viking, the hedge fund firm heavily benefited from two of the hottest stocks this year: its top holding Amazon.com and its third largest holding Netflix. Viking, which over the years has often held a large exposure to health-care stocks, was also helped by its second largest holding Boston Scientific Corp. In the second quarter, Viking boosted its stake in the medical device maker by more than 70 percent.