Fidelity National Information Services (FIS), Inphi Corporation (IPHI) & Two More: Did Maplelane Capital’s Picks Live Up to the Hype?

There were 659 hedge funds in our system whose 13F portfolios on June 30 consisted of at least five long positions in billion-dollar companies. Of those 659 funds, an impressive 627 of them delivered positive returns during the third-quarter from their long positions in those stocks, based on the size of those positions on June 30. All told, their long picks in billion-dollar companies averaged 8.3% returns for the quarter, well above the S&P 500 ETFs’ 3.3% figure. Nonetheless, hedge funds continue to disappoint their investors for the most part, as redemptions have hit the industry hard of late. That can be chalked up to their high fees and the underperformance on the short-side of their portfolios, which provide downside protection but have dragged down overall returns. In this article we are going to examine four companies that were in Maplelane Capital‘s portfolio at the end of the June quarter, including Fidelity National Information Services (NYSE:FIS), Inphi Corporation (NYSE:IPHI),  Take-Two Interactive Software, Inc. (NASDAQ:TTWO), and MicroStrategy Incorporated (NASDAQ:MSTR). 

Leon Shaulov‘s Maplelane Capital has an equity portfolio whose value climbed to $3.79 billion as of the end of September, from $2.35 billion at the end of June. The fund’s 52 long positions in companies that were worth $1 billion or more on June 30 delivered a weighted average return of 14.84% in the third quarter. Even though these returns differ from the fund’s actual returns, because they don’t include short positions, holdings in micro-cap companies, and some other instruments, they still offer good insight into the fund’s investment expertise on the long side of its portfolio. Therefore, we’ll take a closer look at the fund’s positions in the aforementioned companies, and see what kind of return they delivered in the third quarter.

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We’ll start with Fidelity National Information Services (NYSE:FIS), a financial services technology company, in which Maplelane Capital raised its stake by 50% in the June quarter, to 900,000 shares. In the following three months, the stock advanced by 4.9%, but by the end of September, the fund trimmed its stake by 55%, to 400,000 shares, which were worth $30.81 million.

At Q2’s end, a total of 47 of the hedge funds that we follow were bullish on this stock, a dip of 4% from the first quarter of 2016. More specifically, Cantillon Capital Management was the largest shareholder of Fidelity National Information Services (NYSE:FIS) in our system, with a stake worth $555.9 million reported as of the end of June. Trailing Cantillon Capital Management was Citadel Investment Group, which amassed a stake valued at $386.8 million. Eagle Capital Management, OZ Management, and D E Shaw also held valuable positions in the company.

During the June quarter, Maplelane Capital boosted its stake in Inphi Corporation (NYSE:IPHI) by 88%, creating a position that was valued at $36.92 million. The boosting of the stake was a good investment move, seeing as the stock returned 35.8% in the third quarter. By the end of September, the fund further raised its stake by 30%, reporting a position that was valued at $65.21 million, counting 1.5 million shares, and comprising 1.72% of its portfolio’s value.

At the end of the second quarter, a total of 25 of the hedge funds in our system held long positions in this stock, a 17% fall from the first quarter of 2016. One of the largest stakes in Inphi Corporation (NYSE:IPHI) was reported by Columbus Circle Investors, which amassed a stake valued at $17.6 million. Renaissance Technologies, Shellback Capital, and Driehaus Capital also held valuable positions in the company.

We’ll check out two more of the fund’s stock picks on the next page.