KG Funds Management is a Manhattan-based hedge fund founded by Ike Kier and Ilya Zaides. KG Funds manages an equity portfolio worth $107.72 million as of the end of the third quarter. The fund’s five equity positions in companies with market caps above $1.0 billion, posted a weighted average return of 10.79% for the third quarter, based on the size of the holdings at the end of June. The fund invests mainly in tech stocks, which amass over a half of its equity portfolio.
Insider Monkey’s research shows that long bets of hedge funds are profitable most of the times. When we look at the third-quarter returns of the hedge funds in our database which had at least five long positions in companies valued at $1 billion or more, we see their long picks returned 8.3% on average, a full 5.0 percentage points clear of S&P 500 ETFs. However, that long stock-picking prowess is often overshadowed by the hedged portion of their portfolios, in options, bonds, and short positions.
With this in mind, let’s take a closer look at four top picks of KG Funds Management, which include Visa Inc (NYSE:V), Mastercard Inc (NYSE:MA), Moody’s Corporation (NYSE:MCO), and The Walt Disney Company (NYSE:DIS).
KG Funds Management holds 387,600 shares of Visa Inc (NYSE:V) worth $32.05 million as of the end of the third quarter. The fund left its stake unchanged over the quarter, but amid an 11.7% jump registered by the stock, the value of the holding went up from $28.75 million reported as of the end of June. During the second quarter, the number of funds tracked by us long Visa Inc (NYSE:V) increased by 11% to 118. Among these funds, Fisher Asset Management held the most valuable stake in Visa Inc (NYSE:V), which was worth $1134.3 millions at the end of the second quarter. On the second spot was Berkshire Hathaway which amassed $759.4 millions worth of shares. Moreover, Lansdowne Partners, Lone Pine Capital, and Soroban Capital Partners were also bullish on Visa Inc (NYSE:V).
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In Mastercard Inc (NYSE:MA), KG Funds Management added five shares to its equity portfolio, reporting 230,586 shares as of the end of September. However, as the stock advanced by 15.8%, the value of the position went up to $23.37 million from $20.31 million during the same period. A total of 82 funds from our database held shares of Mastercard at the end of June, up by 3% over the quarter. Of the funds tracked by Insider Monkey, Gardner Russo & Gardner, managed by Tom Russo, held the number one position in Mastercard Inc (NYSE:MA), which was worth $857.7 million at the end of June. On Gardner Russo & Gardner’s heels was Andreas Halvorsen’s Viking Global, with a $566.4 million position. Other peers with similar optimism included Jim Simons’ Renaissance Technologies, Charles Akre’s Akre Capital Management and Stephen Mandel’s Lone Pine Capital.