In a new 13G filing with the Securities and Exchange Commission, Steven Cohen’s Point72 Asset Management disclosed a 5.4% stake in Houlihan Lokey Inc. (NYSE:HLI), consisting of 569,640 Class A shares. The investment banking company went public last week by offering 10.5 million shares to the public at an IPO price of $21 apiece.
Point72 Asset Management LP is a family office that manages the assets of its founder Steven A. Cohen. The investment firm is a successor of Cohen’s SAC Capital Advisors, which stopped managing money for outside investors a year ago after charges of insider trading. SAC Capital had been among the most successful hedge funds, delivering an average annual return in the range of 25% to 30% over a period of more than 20 years. Point72 Asset Management mainly focuses its strategy on long/short equities, but also makes substantial quantitative and macro investments. As stated by its 13F filing for the June quarter, Point72 manages a public equity portfolio worth $14.44 billion.
At Insider Monkey, we track hedge funds’ moves in order to identify actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically underperformed the S&P 500 Total Return Index by an average of seven basis points per month between 1999 and 2012. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Index by an average of 95 basis points per month (read more details here). Since the official launch of our small-cap strategy in August 2012, it has performed just as predicted, returning over 123% and beating the market by more than 66 percentage points. We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise (while avoiding their high fees at the same time) rather than large-cap stocks.
Houlihan Lokey Inc. (NYSE:HLI) is a Los Angeles boutique investment bank that has advised some of the most noteworthy debt restructurings, including the bankruptcies of Enron Corp., Lehman Bros. Holdings Inc. and WorldCom Inc., to name just a few. Besides advising on corporate bankruptcies and restructurings, the company also advises corporate mergers and acquisitions, and other related transactions. As already mentioned, the investment banking company went public on August 13 with an IPO price of $21 per share and began trading under the ticker symbol “HLI”. It’s worth noting that the IPO was priced below the range of $22-$24 a share that the company had previously anticipated. However, the stock rapidly went up during its first trading session and closed at $22.40 per share.