19 May

JAT Capital Management: Top 1Q15 Positions

WRITTEN BY Patricia Garner

JAT Capital’s investment tactics

John Thaler’s JAT Capital Management invests primarily in technology, media and telecom, travel, leisure, and gaming companies. The long-short fund approaches its investments in private-equity-like fashion, with a long-term perspective and by working with management teams.

According to Hedge Fund Letters, “Mr. Thaler has a bare knuckle think big investment approach: taking big risks to make big gains. He implements his, what he refers to as, thesis with a boom or bust zeal, backed with a bottom up ‘kick the tires’ approach, historically achieving higher returns than most of the other hedge funds. Mr. Thaler’s investment philosophy, much influenced by his former boss Mr. Shumway, who still advises him, involves delving into businesses that he believes are undervalued and those that he thinks are overvalued, usually taking 60 to 100 positions at any given time. Generally, Mr. Thaler tends to hold long positions for two years and short positions for three to twelve months.”

JAT Capital Management: Top 1Q15 Positions

Coverage of JAT Capital’s top positions in 1Q15

At the end of 1Q15, the fund’s US long portfolio significantly increased in value, surging from $2.6 billion in 4Q14 to $3.7 billion in 1Q15.

According to the hedge fund’s 13F filing, at the end of 1Q15, JAT Capital had major holdings in Time Warner Cable (TWC), Twitter (TWTR), Yahoo! (YHOO), Madison Square Garden (MSG), JD.com (JD), Tesla Motors (TSLA), and LinkedIn (LNKD).

In this series, we’ll take a detailed look at the fund’s top holdings in the first quarter of 2015 by comparing the performance of these stocks with the industry benchmarks and with others. We’ll also analyze each stock from the point of view of a multi-strategy fund, and see whether JAT Capital uses stock as a fundamental bottom-up play or as part of a larger play.

For portfolio exposure to JD.com, investors can consider ETFs such as the KraneShares CSI China Internet ETF (KWEB). It has 8.23% of its holdings invested in JD.com.

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