VY Capital is a Dubai-based investment firm that primarily invests in startups and private companies. The firm was founded in 2013 by Alexander Tamas, a former partner at Russian billionaire Yuri Milner’s DST Global who is credited with DST’s international expansion and its investments in Airbnb, Alibaba Group Holding Ltd (NYSE:BABA) and other successful tech companies. Though VY Capital is largely a private equity firm, it also invests in a handful of publicly-traded tech companies. The firm recently disclosed its U.S equity holdings as of the end of March via a 13F filing submitted with the Securities and Exchange Commission. The filing revealed that VY Capital’s U.S equity portfolio was worth $124.10 million at the end of the first quarter and consisted of only four positions. In this post, we will go over those four stocks and discuss how they have been performing of late.
We track prominent investors and hedge funds because our research has shown that historically their stock picks delivered superior risk-adjusted returns. This is especially true in the small-cap space. The 15 most popular small-cap stocks among a select group of investors delivered a monthly alpha of 80 basis points between 1999 and 2012 (see the details here).
#4 MakeMyTrip Limited (NASDAQ:MMYT)
– Shares held by VY Capital (as of March 31): 370,000
– Value of Holding (as of March 31): $6.69 million
Let’s start with MakeMyTrip Limited (NASDAQ:MMYT), in which VY Capital more than tripled its stake during the first quarter. Shares of the Indian online travel company spiked at the beginning of the year after Chinese online travel leader Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) announced an investment of $180 million in MakeMyTrip Limited (NASDAQ:MMYT) through convertible bonds. Along with the investment, Ctrip.com was also given permission to make open-market purchases of MakeMyTrip Limited’s shares. Through convertible bonds and stock purchases Ctrip.com is allowed to boost its stake in the company to up to 26.6% of its shares. Following the investment by Ctrip.com, MakeMyTrip has started offering heavy discounts in an effort to increase its customer base. That coupled with the rollout of 4G services in India and the projections of explosive growth in the Indian online travel space could push the company’s stock higher in the coming quarters, according to analysts. Among the hedge funds tracked by us, Daniel Gold‘s QVT Financial was the largest shareholder of MakeMyTrip Limited at the end of 2015, owning 1.55 million shares of the company,.
#3 LinkedIn Corp (NYSE:LNKD)
– Shares held by VY Capital (as of March 31): 265,000
– Value of Holding (as of March 31): $30.30 million
The 50% drop in LinkedIn Corp (NYSE:LNKD)’s stock during the first quarter was used by VY Capital as an opportunity to boost its holding in the company by 71% during that period. Shares of the online professional networking company tanked in February after it issued dismal guidance for the full 2016 year along with its fourth quarter of 2015 results. Though the first quarter numbers the company recently released seem to suggest that it is back on track and that a lot of investors’ fears were unfounded, its stock hasn’t recovered much from the beating it took in February and currently trades down by 43.37% year-to-date. Going into its first quarter earnings, analysts had expected the company to report EPS of $0.60 on revenue of $829.90 million. However, LinkedIn Corp managed to beat those estimate by reporting EPS of $0.74 on revenue of $861 million for the quarter. Following the earnings release, several analysts and brokerages raised their price target on the stock, including analysts at Goldman Sachs, who raised their price target on the stock to $162 from $155 on May 1, while maintaining their ‘Buy’ rating on it. Funds that reduced their stake in the company during the first quarter included Paul Cantor, Joseph Weiss, and Will Wurm’s Beech Hill Partners, which cut its small holding by two-thirds to 1,875 shares.
VY Capital’s top two U.S public equity positions are uncovered on the next page.