Valiant Capital Partners’ liquid portfolio was up a little more than 4 percent in the first quarter, according to an investor. This means it significantly outperformed the S&P 500, which lost 4.6 percent for the period, and the Nasdaq Composite, which dropped 10 percent.
The Tiger Grandcub headed by Chris Hansen rose more than 11 percent in January. And it has done a good job of maneuvering through the subsequent stock sell-off and of preserving client capital since then — especially in March, when the fund was down an estimated 1 percent, much less than the stock indices, the investor says.
This is because Valiant, which manages a little more than $1.2 billion, has benefited from its short book this year. Over the first two months, when Valiant was up a little less than 5 percent, longs cost the fund more than six percentage points of performance, according to the hedge fund’s February exposure report, obtained by Institutional Investor. However, the shorts more than offset this loss, kicking in 10.8 percent to performance. Macro added a further 79 basis points.
In February, when the stock market began sharply selling off, longs cost Valiant more than 9 percent of performance. Shorts, though, added about four percentage points, mitigating the damage, the report said.
“While most of the long-short industry abandoned or significantly altered their short-selling strategies, and capital flowed increasingly toward multimanager platforms that have low volatility and short-term horizons, we doubled down at just getting better at what we do,” Hansen told clients in his fourth-quarter 2024 client letter. “We have not strayed from our focus on preservation of capital. The best testament to our conservative positioning continues to be our ability to protect capital when equity markets decline.”
In the letter, Hansen reminded investors that Valiant runs its book close to market-neutral. At the same time, he is mindful that even though the firm is confident that its portfolio positioning, macro hedges, and shorts will protect capital during severe market drawdowns or dislocations, it is “under no illusion” that the portfolio is insulated from volatility.
As of the end of February, Valiant was 140 percent long and 110 percent short, for a net long exposure of 30 percent, according to the monthly report.
By far its largest sector exposures were to information technology (23.65 percent net) and industrials (20 percent). Its biggest geographic exposures were to India, a long-time Valiant favorite; Japan; and Western Europe. It had only a 3.8 percent net long exposure to the U.S.
Valiant’s five largest long positions were in Taiwan-based contract chip maker Taiwan Semiconductor Manufacturing; drug giant Eli Lilly; German energy company Siemens Energy; Core Scientific, which provides digital infrastructure for bitcoin mining; and German sportswear company Adidas.