AQR Capital Management LLC, run by former Goldman Sachs quant Clifford S. Asness, is a global investment management firm with nearly $154 billion assets under management. The Connecticut-based firm employs a wide array of investment strategies such as risk-parity, momentum, convertible arbitrage and event-driven strategies. The multi-billion-dollar firm, whose name stands for applied quantitative research, has been attempting to convert cutting-edge academic research in areas of finance and financial markets into successful quantitative strategies for both institutional and retail buyers.
In a rather long and detailed interview conducted by Institutional Investor Journals, a provider of research on portfolio management and strategy, outspoken quant manager Cliff Asness discussed about alpha, beta, exchange-traded funds, the 2-and-2o payment structure used by hedge funds, and other issues. Mr. Asness also touched a rather interesting topic about transparency in the hedge fund industry, saying that the hedge fund world has become a lot better in terms transparency in recent years due to investor pressure. More importantly, the billionaire money manager pointed out that investors should not seek to receive position-by-position transparency, but rather aim at understanding what a hedge fund actually do and how they pick stocks. This kind of transparency would help investors understand what they should pay for the multitude of strategies employed by hedge funds, according to Mr. Asness. Leaving this discussion aside, the following article will list AQR Capital Management’s five largest-equity holdings at the end of the first quarter of 2016, as well as discuss their performance year-to-date.
At Insider Monkey, we track around 770 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).
#5. Alphabet Inc. (NASDAQ:GOOGL)
– Shares owned by AQR Capital Management as of March 31: 551,415
– Value of AQR Capital Management’s holding as of March 31: $420.68 Million
AQR Capital Management owned 551,415 Class A shares of Alphabet Inc. (NASDAQ:GOOGL) at the end of the March quarter, 7,189 shares more than at the end of the December quarter. The upped stake was valued at $420.68 million on March 31 and accounted for 0.8% of the firm’s entire portfolio. Alphabet, which people continue to call Google, has enjoyed impressive growth in recent years thanks to its search engine. The company dominates the global search engine industry, with a massive 89.4% global market share in April. Yahoo and Bing, Google’s closest competitors in the industry, had a combined market share of less than 8% in April. Alphabet also owns multimedia platform YouTube, which has by far the highest number of visits among all video-streaming platforms in the United States. One should not forget about Alphabet’s “Other Bets” segment, which will most likely unlock flouring revenue streams for the search giant in the upcoming years. Alphabet has seen its market value drop by 9% since the beginning of 2016. Andreas Halvorsen’s Viking Global Investors LP owns 2.05 million Class A shares of Alphabet Inc. (NASDAQ:GOOGL) as of March 31.