Light Street Capital has resumed its upward trajectory.
The Tiger Grandcub headed by Glen Kacher posted a 5.78 percent gain in its long-short fund in October, boosting its return for the year to 53.26 percent, according to someone who has seen the results. It remains one of the top-performing hedge funds this year and perhaps the best-performing Tiger-related fund. It had surged 54.6 percent in the first half but then lost about 9 percent during a volatile third quarter.
Light Street’s long-only fund gained 3.84 percent in October and is up 39.85 percent for the year, the source says. It lost only a couple of percentage points in the third quarter.
The disparity in performance between the two funds suggests Light Street’s long-short fund made money last month from both longs and shorts. The firm declined to comment.
Light Street is one among several Tiger-related and other tech-driven funds that are battling to return to their high-water marks after a couple of big losing years during the massive tech selloff a few years ago.
As Institutional Investor has reported this year, Light Street has been bullish on artificial intelligence and on semiconductor companies deemed to be big AI plays. At the end of the second quarter, the firm’s two largest positions — Nvidia and Taiwan Semiconductor Manufacturing — accounted for roughly 30 percent of the U.S. stock long portfolio.
Nvidia remained Light Street’s largest U.S. long position at the end of the second quarter, making up more than 16 percent of assets despite the firm’s dumping more than one-quarter of the shares during the period, according to the most recent 13F filing. (Third-quarter U.S. stock holdings will not be disclosed until nearly two weeks from now.) Nvidia had spun downward over the summer amid concerns about the timing of the launch of its next-generation Blackstone chip, among other concerns.
However, since hitting bottom, the stock has surged nearly 40 percent, closing Monday at a near-record $136.05. Last Friday, Nvidia learned it would be joining the Dow 30 Industrials, replacing chip rival Intel.
Meanwhile, TSMC is the world’s largest contract chip maker that counts Nvidia as a major customer. Shares of TSMC were up almost 10 percent in October.
In the second quarter, Light Street also initiated a position in Celestica, which provides supply chain solutions and immediately became the hedge fund’s third-largest U.S.-listed long. Since the end of the second quarter, the stock has jumped 26 percent, surging 34 percent in October alone.
Advanced Micro Devices, another chip giant, was Light Street’s fourth-largest long at the end of June.
In the second quarter, Light Street fully liquidated two Magnificent Seven stocks: Microsoft, previously its ninth-largest long position, and Alphabet, formerly its 11th-largest.