Light Street Capital Management posted another strong monthly gain.
The long-short fund headed by Tiger Grandcub Glen Kacher rose 4.1 percent in May and has surged 41.2 percent for the year, making it one of the top-performing hedge funds over the first five months of 2024. Its long-only fund was up 5.6 percent for the month and 25.8 percent year-to-date.
For comparison, the S&P 500 climbed 5 percent in May and 11.3 percent for the year, including dividends reinvested.
The performance of the hedge fund firm’s two main funds over the first five months suggests Light Street is making money on both the long and short sides — quite a feat given that the broad market is up by double digits. Light Street’s strong May performance also contrasts with those of several other high-profile Tiger descendants that posted flattish results last month.
Light Street declined to comment.
The firm is clearly benefiting from big bets on two of the top artificial intelligence semiconductor plays, which combined accounted for 28 percent of the U.S. stock portfolio at the end of the first quarter.
At the end of the first quarter, Nvidia made up 17 percent of the U.S. long portfolio, even after Light Street trimmed its stake by 21 percent. The stock surged by about 27 percent in May alone and was up approximately 150 percent for the year through Friday. Light Street initiated the position in the fourth quarter of 2022.
Contract chip maker Taiwan Semiconductor Manufacturing was the firm’s second-largest long at the end of the first quarter, accounting for about 14 percent of U.S. assets after Light Street bulked up its stake by about 45 percent.
“Taiwan Semiconductor . . . epitomizes our definition of a technology infrastructure arms dealer,” Light Street told clients in its fourth-quarter letter, obtained by Institutional Investor. The letter highlights an emphasis on AI.
“Today, TSMC has become one of the most dominant companies in the applied technology sector,” Light Street added, stressing that the company has a more than 59 percent revenue share and a more than 90 percent profit share of the $230 billion-plus semiconductor foundry industry.
Light Street’s fourth-largest long is another chip maker: Advanced Micro Devices, which is up more than 21 percent for the year. E-commerce and cloud computing giant Amazon — up about 23 percent year-to-date — is the third-largest long.
Most other Tiger-related funds are lagging behind Light Street and the broad market indices for the year, and several barely made money in May.
Coatue Management was up 1.7 percent last month but has increased only about 7.8 percent for the year, a source says. Valiant Capital Partners was able to squeeze out just six basis points of gains in May and is up 6.16 percent for the year, according to an email communication with clients that was seen by II. In the first quarter, Valiant established a new large stake in TSMC that is now its second-largest long position, it told clients.
Elsewhere, Viking Global Investors’ long-short fund gained just 10 basis points in May and is up 6 percent for the year, says someone who has seen the results. The long-only fund fared better, rising 2 percent for the month and 8 percent for the year. Unlike many other Tiger-related funds, Viking counts only one Magnificent Seven stock among its top-ten holdings: Amazon. Payments giant Visa is its largest long position.
Maverick Capital, meanwhile, posted a 50bp gain in its long-short fund in May. It has jumped 10.4 percent for the year, according to a hedge fund database. Maverick Long was up 4 percent last month and about 11 percent for the first five months, and Maverick Long Enhanced climbed 3 percent for the month and 11.3 percent year-to-date.
