Sylebra Capital picked up in January where it left off in December — And this is not a good thing. The Tiger Grandcub headed by Dan Gibson suffered a 5.7 percent loss in January after dropping 13.8 percent in December.
December’s decline capped a remarkable reversal of fortune for Sylebra, which at the end of April was up 27.2 percent. Its main fund, Sylebra Bell, finished 2024 up only 7.8 percent. The smaller Sylebra Parc rose just 2.7 percent last year.
Sylebra declined to comment on its recent woes.
Gibson was previously a partner at Philippe Laffont’s Coatue Management. He co-heads Sylebra with chief operating officer Matthew Whitehead, who joined the firm in January 2016 from LIM Advisors, a hedge fund firm based in Hong Kong.
The firm emphasizes small and midcap tech, media, and telecom stocks. It eschews big tech like the Magnificent Seven. It also likes to tout its short-selling prowess. The fund generally runs a very low net exposure that falls between plus and minus 15 percent, a much lower figure than that of the typical tech hedge fund.
According to someone knowledgeable about Sylebra’s funds, the firm was hurt last year by short squeezes and underperformance by its SMID stocks, as well as by position sizing.
At year-end, its three largest stocks were software companies — Paycom Software, Impinj, and Elastic NV — accounting for roughly 45 percent of the U.S. long portfolio. In January, shares of Paycom, an online payroll and human resource software provider, gained 1.2 percent. It became Sylebra’s largest long at year-end, making up more than 18 percent of U.S. long assets after the hedge fund firm boosted its stake by about 64 percent.
Shares of Dutch software company Elastic, the third-largest long, climbed more than 13 percent in January. In the fourth quarter, Sylebra increased its stake by about two-thirds. However, No. 2 long Impinj dropped 12.6 percent in January. The maker of radio-frequency identification devices and software was responsible for nearly 12 percent of assets at year-end. It was Sylebra’s largest U.S. long in each of the first three quarters of 2024. The stock was up 55 percent last year, after dropping about 40 percent from its peak in mid-October.
It’s not known what role shorts played in Sylebra’s large January loss.
Sylebra also was negatively affected in January by No. 4 long PureCycle Technologies, which fell more than 9 percent for the month. The company, known for its polypropylene recycling technology, accounted for more than 10 percent of U.S. assets. No. 5 long RingCentral, known for its doorbell cameras, lost 2.6 percent last month.
Chip maker Advanced Micro Devices, Sylebra’s sixth-largest long, is perhaps the largest-capitalization stock. It dropped 4 percent in January.