Economic Recession is Crushing These 5 Hedge Funds

3. Maverick Capital

YTD Loss as of May 2022: 34%

Maverick Capital is a hedge fund based in Texas. It is led by Lee Ainslie, a Virginia-born investor with a personal net worth in the tens of millions. The portfolio value of the fund, at the end of the first quarter of 2022, was around $5 billion. In a letter to investors, Ainslie has acknowledged the losses faced by his fund, noting that a sizeable position in Korean firm Coupang, the broad decline in high-growth and mega-cap tech stocks, and the tumble in the biotech sector as some of the reasons behind the record losses for his firm. 

Maverick Capital has invested a lot of money in Amazon.com, Inc. (NASDAQ:AMZN), a diversified technology firm with core interests in ecommerce. Among the hedge funds being tracked by Insider Monkey, London-based investment firm Citadel Investment Group is a leading shareholder in Amazon.com, Inc. (NASDAQ:AMZN), with 4 million shares worth more than $13 billion. 

In its Q4 2021 investor letter, Mercator International, an asset management firm, highlighted a few stocks and Amazon.com, Inc. (NASDAQ:AMZN) was one of them. Here is what the fund said: 

“Transformative technologies often generate euphoria. People are excited by the big new thing that is changing the world. We saw this pattern with the boom of westward canal transportation at the dawn of the nineteenth century. Railway stocks similarly attracted large numbers of eager investors a few decades later. Then came the electrification of America, the telephone, and the automobile industry, to name just a few transformative technologies.

The initial euphoric phase always ends with a reality check. Valuations come back to earth. At the end of the cycle, only a few companies remain standing. A shakeout has a way of clarifying the field of opportunities.

For example, readers may recall that when the internet bubble burst two decades ago, Amazon.com, Inc. (NASDAQ:AMZN) stock suffered greatly but pet.com was gone. For those investors who had stayed on the sidelines, this was an excellent time to buy Amazon.com, Inc. (NASDAQ:AMZN). The company’s business model had shown its merits and competition was rapidly shrinking. The stock price was now also much more attractive.”