Hedge fund managers were busy protecting performance and taking risk off the table in the fourth quarter, according to regulatory filings Thursday.
Many saw the value of their U.S. equity holdings drop in the period, as the industry careened toward its worst year since 2011.
Some came from losses amid market volatility while others resulted from stock sales to reduce risk or meet client redemptions. Investors pulled $42.3 billion from hedge funds, the most in at least five years, industry tracker BarclayHedge said in a report.
Billionaire David Tepper’s hedge fund greatly reduced its holdings of U.S.-listed stocks in the fourth quarter. The value of Appaloosa’s stakes fell 64 percent to $2.02 billion. That compares with a 14 percent decline in the S&P 500 index. Dan Loeb’s Third Point saw the value of its equity holdings fall by about half, or $6 billion, in the quarter.
Here are some other key takeaways from the latest 13F filings, which show the U.S. stock holdings of money managers with more than $100 million:
- One surprise was hedge fund managers’ interest in timeshares. David Einhorn built a position in Hilton Grand Vacations Inc., along with Highfields Capital Management, Davidson Kempner and Senvest Management.
- Two stocks in focus last quarter were embattled General Electric Co. and PG&E Corp. Viking Global Investors exited its stake in GE, worth about $1.5 billion. Hedge funds were mixed on PG&E. Baupost pared its holding in the California utility, Viking exited and BlueMountain Capital Management boosted. Appaloosa added marginally, leaving the hedge fund with a position worth $153.6 million as of Dec. 31.
- When it comes to the FAANG stocks, one of the most notable moves was by Chase Coleman’s Tiger Global Management, which cut its Amazon.com Inc. stake by more than a third. Steve Mandel’s Lone Pine Capital sold its $1 billion stake in Alphabet Inc., the parent of Google.
- Alibaba was a popular tech stock for some. Viking and Coatue Management each added to their positions in the Chinese e-commerce company. But Tepper’s Appaloosa axed its entire position, selling 1.5 million shares worth about $247 million.
- Managers streamed out of Spotify Technology SA. Steve Cohen’s Point72 Asset Management, Moore Capital Management and Wexford Capital reduced their positions while Lee Ainslie’s Maverick Capital exited completely. But Spotify was Tiger Global’s largest U.S. equity position.
- A new darling: Anaplan Inc., a business-planning software company that went public in October after hiring former Tesla Inc. executive Dave Morton as its chief financial officer. It was a favorite of Baillie Gifford, TIAA, Coatue Management and Alkeon Capital Management.
- While not a hedge fund, Warren Buffett’s Berkshire Hathaway reported one of the biggest surprises. It exited its $2 billion stake in Oracle. The news sent the software company’s shares lower.
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