By Shawn Langlois
In a turbulent year in which hedge funds are the world have struggled to deliver the goods for their investors, one “Tiger cub” has seen his assets under management explode to the upside thanks in large part to two big wins: one long and one short.
Philippe Laffont, who earned the “Tiger cub” nickname after honing his craft at Julian Robertson’s Tiger Management, loaded up on Tesla (NAS:TSLA) and shorted fraudulent German payments group Wirecard in a prescient combo that has helped his Coatue Management fund return 52% this year through November, according to the Financial Times .
Those outsized returns are enough to make Coatue, with $11 billion under management, one of the best-performing big hedge funds in the world in 2020, as the average hedge fund lost almost 5% through October, HFR numbers show. Equity-focused hedge funds have only delivered a 3% return, on average, even with global stock markets rallying more than 10%.
At the end of the third quarter, Coatue held 3.1 million shares of Tesla, which, after its nearly 600% rally so far this year, would now be worth about $1.3 billion, representing a big chunk of the overall portfolio. On the short side, Coatue cashed in on Wirecard’s implosion. The company went belly-up after billions in corporate cash went missing. At the start of the year, Wirecard shares were trading at about 110 euros, but have since dropped to penny-stock status.
The Financial Times quoted Laffont in a rare public appearance at an event back in 2018 to offer a glimpse into how he approaches his investments.
“I truly believe that in every portfolio you need to ask yourself what is going to be more relevant [in] five to 10 years versus today,” he said, according to the FT . “The most interesting trend is that technology, which used to be mostly software and semiconductors and obscure things, it’s coming everywhere, it’s the future of cars and the future of transportation and every sector.”