Silver Arrow Partners, L.P, a New York-based fund, reported returns of 1.04% for the second quarter of 2015 along with year-to-date returns of 0.75% in its recently released second quarter investor letter. The investment manager closed the second quarter with 14 equity investments in its portfolio and its top five positions accounted for 46.1% of its overall portfolio. The top five long investments of Silver Arrow Partners include Facebook Inc (NASDAQ:FB), Celgene Corporation (NASDAQ:CELG), Hertz Global Holdings Inc (NYSE:HTZ), Canadian Pacific Railway Limited (USA) (NYSE:CP), and Union Pacific Corporation (NYSE:UNP). The fund manager did not disclose its individual positions in these companies.
While discussing the performance of Facebook Inc (NASDAQ:FB) the investment manager discussed the growth potential of the company. According to Silver Arrow Partners, “Facebook stands out among the large capitalization Internet companies as the one with the most growth catalysts for any company in the sector”. Furthermore, the fund manager mentioned a couple of factors driving growth for the company, including the increasing dominance of the social network in terms of video volume and video advertising revenue.
Facebook Inc (NASDAQ:FB) is “at the early stage of monetizing its Instagram application” and the growth in WhatsApp’s monthly active users is phenomenal. The online messaging platform has over 900 million active users compared to 400 million monthly active users at the time of its acquisition. Last but not the least, Silver Arrow Partners added that the upcoming launch of Oculus VR in 2016 is another “meaningful revenue contributor” for Facebook Inc (NASDAQ:FB). According to our database, 129 hedge fund managers tracked at Insider Monkey were invested in Facebook as of March 31, with aggregate investments of $7.09 billion at the end of the first quarter. Stephen Mandel’s Lone Pine Capital was the largest shareholder of the company in our database with 8.11 million shares valued at $666.51 million.
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Celgene Corporation (NASDAQ:CELG) is the second stock in the list of long positions of Silver Arrow Partners. It was among the three pharmaceutical stocks in the portfolio of the fund manager, along with Gilead Sciences, Inc. (NASDAQ:GILD) and Biogen Inc (NASDAQ:BIIB). The investment manager reported profits from each of its pharmaceutical positions during the second quarter. Silver Arrow Partners called Celgene “a dominant player in the treatment of cancer.” Earlier in July, Celgene Corporation (NASDAQ:CELG) and Receptos Inc (NASDAQ:RCPT) entered into a definitive merger agreement under which Celgene will acquire Receptos for $7.32 billion. At the end of the first quarter, 67 hedge fund managers reported positions in the pharmaceutical company with net investments of $1.96 billion. Orbimed Advisors, led by Samuel Isaly, was among the primary investors of the company with 3.17 million shares with a market value of $365.67 million.
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Silver Arrow Partners mentioned holding a long-position in Hertz Global Holdings Inc (NYSE:HTZ) at the end of the second quarter. The fund manager initiated a position in the company after its stock dropped from the $30 price range into the $20 price range because of some regulatory issues. The investment manager further said, “Our detailed analysis led us to conclude that the likely amount of the restatement was unlikely to be significant to Hertz in the future and that the stock was over-reacting to the uncertainty.” The rental car company filed a financial restatement on July 16 for the fiscal year ending on December 31, 2014 along with restated results for 2012 and 2013. Hertz Global Holdings Inc (NYSE:HTZ) has attracted activist investments from the likes of Carl Icahn of Icahn Capital LP. Among hedge funds tracked by Insider Monkey, 63 fund managers had positions worth $5.01 billion in the company at the end of the first quarter. Carl Icahn reported ownership of 51.92 million shares of Hertz Global Holdings with a market value of $1.12 billion at the end of the first quarter.
Canadian Pacific Railway Limited (USA) (NYSE:CP) and Union Pacific Corporation (NYSE:UNP) are among the railroad investments of the fund manager. Silver Arrow Partners added “We profitably sold our investment in CSX Corp. (ticker: CSX) earlier in the quarter, in order to focus our attention and capital in two railroad companies, Canadian Pacific Railway Limited (ticker: CP) and Union Pacific Corporation (ticker: UNP). We believe these investments represent multi-year opportunities.” It has been a difficult year for Canadian Pacific Railway Limited (USA) (NYSE:CP) so far, whose shares have suffered a year-to-date decline of 18.57% and by 12% in the second quarter. The railroad company bagged net investments of $6.88 billion from 48 hedge fund investors tracked by Insider Monkey at the end of the first quarter. The same story continues for Union Pacific Corporation (NYSE:UNP) whose shares have declined by 18.77% year-to-date. It attracted investments worth $2.33 billion from 69 hedge fund investors at the end of the first quarter. Bill Ackman of Pershing Square held a large position in Canadian Pacific Railway of 13.94 million shares valued at $2.55 billion. Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke, and John Campbell held 3.03 million shares of Union Pacific Corporation in its portfolio at the end of the first quarter valued at $328.33 million.
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