Billionaire Robert Citrone, a so-called Tiger Cub due to his previous position at the Julian Robertson’s Tiger Management, founded Discovery Capital Management LLC in 1999. Connecticut-based Discovery hasn’t performed quite well in the past two years or so, as the firm lost money for two consecutive years. Mr. Citrone’s biggest hedge fund, called Discovery Global Opportunity, was down 0.6% in 2015, while the smaller Discovery Global Macro fund was down 5.8%. However, the former high-school wrestler, who initially attracted capital from legendary investors George Soros and Mr. Robertson, had generated an annualized return of roughly 17% since his firm’s inception through mid-2013. As Mr. Citrone rarely gives interviews or speaks at investment conferences, retail investors can get a glimpse into his mind and investment strategy by closely examining the 13F filings submitted by his firm. That said, the following article will disclose Mr. Citrone’s major moves implemented during the first quarter of this year.
At Insider Monkey, we track around 730 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details about our small-cap strategy).
Billionaire Rob Citrone Cuts Alibaba Group Holding Ltd (NYSE:BABA) Stake by 43% during Q1
– Number of shares owned by Discovery as of March 31: 6.00 Million
– Value of Discovery’s holding as of March 31: $474.34 Million
In the first quarter of 2016, Discovery Capital Management, LLC trimmed its stake in Alibaba Group Holding Ltd (NYSE:BABA) by 4.60 million American Depositary Shares (ADSs) or approximately 43% to 6.00 million ADSs. The trimmed stake was valued at $474.34 million at the end of March and accounted for 6.9% of the fund’s entire portfolio. Just recently, the International Anti-Counterfeiting Coalition suspended the membership of the Chinese e-commerce juggernaut, after receiving strong criticism from various companies that suggested Alibaba was the largest marketplace for fakes in the world. Some of the Coalition’s brands, including Gucci America and Michael Kors, quit the group after the e-commerce giant gained acceptance into the highly-respected Coalition earlier this year. Michael Kors named Alibaba as their “most dangerous and damaging adversary”, but the Chinese giant recently said it plans on tackling and solving counterfeiting issues. Alibaba ADSs have gained 20% in the past three months, but are still down 2% year-to-date. Boykin Curry’s Eagle Capital Management owns 3.73 million ADSs of Alibaba Group Holding Ltd (NYSE:BABA) as the end of the March quarter.
