Some big U.S. hedge funds loaded up on SPACS, value stocks during first quarter (updated)

Value Exchange International

17/05/2021 21:23

(Adds details on Tiger Global, Starboard Value SPACs)
    By David Randall
    NEW YORK, May 17 (Reuters) - A number of well-known U.S.
hedge funds bought value stocks and blank-check acquisition
companies, selling some winners from the technology-led stock
rally as bond yields rose during the first quarter, filings
released on Monday showed. 
    Special-purpose acquisition companies, known as SPACs,
proved popular among hedge fund managers, with funds such as
Third Point and Saschem Head adding shares of SPACs, including
FinTech Acquisition Corp V  FCTV.O  and healthcare company Orion
Acquisition Corp  OHPA.O  to their portfolios. 
    Tiger Global added shares of Revolution Healthcare
Acquisition Corp and Soaring Eagle Acquistion Corp and trimmed
its position in Facebook Inc. 
    Activist investor Starboard Value invested in a string of
other so-called SPACS that exist to buy private companies and
take them public, including Montes Archimedes Acquisition Corp,
Altimar Acquisition Corp, Churchill Capital Corp II and Forest
Road Acquisition Corp.  L1N2N12WM 
    Over 400 SPACs have listed their shares since the start of
2021, though the majority are underperforming the broad stock
market, a Reuters analysis  https://www.reuters.com/business/spac-returns-trail-sp-500-retail-investors-temper-interest-2021-05-04showed.
  urn:newsml:reuters.com:*:nL1N2M82J8 
    At the same time, several hedge funds added to financial,
energy and consumer companies. Third Point added a new position
in Carvana Co  CVNA.N  and Uber Technologies Inc  UBER.N , while
Epoch Investment Partners added new positions in energy firms
such as Exxon Mobil Corp  XOM.N , Pioneer Natural Resources Co
 PXD.N  and Diamondback Energy Inc  FANG.O . 
    Billionaire Ray Dalio's Bridgewater Associates, the largest
hedge fund manager in the world, added a new position in General
Motors Corp  GM.N , Ecolab Inc  ECL.N  and Johnson Controls
International PLC  JCI.N  while selling out of its position in
media companies, including the New York Times Co, News Corp and
Discovery. 
    The moves into stocks that benefit from a broadly growing
economy came during a quarter in which so-called value stocks -
in industries such as financials and materials that rise on
economic growth - surged and interest rates rose as investors
positioned for a reopening of the global economy after the
coronavirus pandemic. 
    The Russell 1000 Value index, for instance, is up 17% for
the year to date, while the Russell 1000 Growth index - which is
top-loaded with shares of technology companies like Apple Inc
and Amazon.com Inc that surged during the economic lockdowns -
is up 3.5% over the same time. 
    Bond yields, meanwhile, rose to reflect rising inflation
expectations, increasing borrowing costs for consumers and
companies. Consumer prices rose in April by the largest measure 
in 12 years, prompting some mutual fund managers to increase
their cash positions and turn more defensive.  urn:newsml:reuters.com:*:nL1N2N01IY
    Hedge fund managers' positions were revealed in 13F filings
that show what fund managers owned at the end of the quarter.
While they are backward-looking, these filings are one of the
few public disclosures of hedge fund portfolios and are closely
watched for clues on trends and what stocks certain fund
managers are favoring. 
    They do not disclose the date a purchase was made during the
quarter. 
    Some hedge fund managers unloaded shares of companies that
performed well over the last year, suggesting they see limited
gains ahead. Epoch Investment Partners, for example, liquidated
its position in Under Armour Inc, which is up 34% for the year
to date, and cut its position in Amazon by roughly 46%. 
    Third Point, meanwhile, sold out of its position in Alibaba
Inc. 

 (Reporting by David Randall; Editing by Dan Grebler)
 ((David.Randall@thomsonreuters.com; 646-223-6607; Reuters
Messaging: david.randall.thomsonreuters.com@reuters.net))