Jericho Capital Asset Management, one of the hottest hedge fund firms over the past few years, has launched a new fund to invest in Asia.
Jericho Asia Opportunities LP and Jericho Asia Opportunities Ltd., the new fund's offshore equivalent, began investing May 1, according to a regulatory filing and an investor. The funds, which together have raised at least $176 million, require a minimum investment of $1 million, filings show.
Meanwhile, the firm's flagship fund, Jericho Capital Partners, is having another strong year. The investment pool was up about 18 percent through April, according to an investor. Jericho Capital Partners posted a 12.5 percent gain in 2018, a year when equity indexes finished in the red, and gained returned 25 percent in 2017.
Jericho declined to comment.
The firm, founded by Josh Resnick in 2009, manages about $2 billion, excluding the new Asia fund. The long-short hedge fund firm specializes in technology, media, and telecommunication stocks.
The new fund aims to capitalize on what Jericho perceives as growing opportunities in the Asia-Pacific region, according to an investor. Asia Opportunities was quietly made available only to existing investors in its flagship fund, with fundraising opening and closing on the same day, the investor said.
Jericho’s U.S. long stock portfolio was valued at about $2.2 billion at the end of the first quarter, according to the firm’s most recent 13F quarterly filing, more than double its value of $983 million at year-end. The portfolio held 27 different stocks at the end of March.
The firm established 17 of the 27 current holdings in the first quarter, or more than half the total. In fact, 12 of its 17 largest longs were newly established in the first three months of this year. This does not include number two holding Sea, whose position size quadrupled in the first quarter. Sea has two main businesses: digital entertainment and e-commerce.
Chipmaker Analog Devices is the firm's largest long after Jericho established a new position of 1.825 million shares during the three months through March. Observers are wondering how badly the company may be hurt by President Donald Trump's decision to ban U.S. companies from doing business with Chinese telecom giant Huawei Technologies Co. Analog Devices is scheduled to report earnings on May 22.
Other new positions that cracked Jericho's top 10 holdings include payments app Square, Argentine e-commerce company MercadoLibre, and Chinese e-commerce giant JD.com.
Cloud computing company VMware remains Jericho’s third largest long position, though the hedge fund has been sharply reducing its stake over the past few quarters.
VMware is more than 80 percent owned by Dell Technologies, which acquired this stake in 2016 when it bought EMC Corp. In March 2018, Jericho sent a letter to directors of VMware's board to raise concerns about Dell possibly making a bid for a reverse merger.
The hedge fund firm also liquidated six individual common stock positions in the first quarter, according to the 13F filing. Of the stocks that Jericho unloaded, the largest position was in internet security company Palo Alto Networks. The company had been the firm’s sixth largest U.S. long when the position was established in the fourth quarter.
