Money managers for the ultra-wealthy dumped beleaguered technology stocks during the fourth quarter — right before the market rallied in 2023.
Both Iconiq Capital and the investment firm for the Walton family’s fortune sold shares of cloud-computing company Snowflake Inc., which has surged 20% this year after a steep slide in 2022.
Stan Druckenmiller’s Duquesne Family Office also exited Microsoft Corp. in the fourth quarter, according to a regulatory filing Tuesday. The tech giant gained 13% since the start of January, after falling 29% last year. Druckenmiller also exited Amazon.com Inc. after initiating the position in the third quarter. The stock fell 50% in 2022 but is up 19% so far this year.
By contrast, hedge funds — some of which got hammered by their tech holdings last year — dialed up their bets on the sector in the fourth quarter. Lone Pine Capital boosted its Microsoft stake by 23%. The stock is also the biggest holding of Tiger Global Management. Meanwhile, Seth Klarman’s Baupost Group more than tripled its Amazon stake.
Druckenmiller, 69, made at least one prescient tech bet: Nvidia Corp., which now makes up about 4% of Duquesne’s $2 billion US equity portfolio. That’s proven to be a savvy bet given the craze around artificial intelligence and ChatGPT. Nvidia, seen as a benefactor of the rise of AI, has rallied 57% this year.
Tuesday was the deadline for thousands of institutional investors, including hedge funds, pension funds and endowments, to report certain US equity holdings to the Securities and Exchange Commission through quarterly 13F filings.
Other highlights:
- Turmoil in crypto markets continued to reverberate. Soros Fund Management disclosed a bet against Silvergate Capital Corp., a bank under scrutiny for its ties to disgraced crypto entrepreneur Sam Bankman-Fried’s bankrupt business empire. Iconiq cut its stake in Robinhood Markets Inc..
- Both firms had connections of their own to the FTX saga: Iconiq was one of the investment firms that pitched into FTX funding rounds, and months before FTX’s collapse, Bankman-Fried took a more than 7% stake in Robinhood, which the brokerage is seeking to buy back.
- Bonds are back: Elliott Investment Management and Soros Fund Management both disclosed positions in corporate-bond exchange-traded funds during the fourth quarter. Elliott disclosed a position in HYG, a high-yield corporate bond ETF. And Soros Fund Management purchased about $255 million worth of LQD.
--With assistance from Miles Weiss.
This article was provided by Bloomberg News.