Family offices are much more secretive compared to hedge funds. While hedge funds have many clients and have to provide information about their activity and sometimes explain their investments, family offices manage only the money of a family and some of its key employees. As hedge funds have been underperforming the market on average lately, many of them chose to convert to family offices and return outside investor capital. At the same time, there are many money managers and banks that offer multi-family offices, managing the wealth of hundreds of families (take a look at the 11 biggest family offices in the world), but the most interesting ones to watch are the family offices that manage the wealth of individual families.
One such family office is Wildcat Capital, which is led by Leonard A. Potter and Drew Tarlow. Wildcat Capital manages around $1.80 billion for the family of billionaire David Bonderman, the founding partner of private equity firm TPG Capital. Bonderman has a net worth of around $2.5 billion and Wildcat probably played a major role in building this figure, based on its returns. According to our calculations, which take into account a fund’s investments worth over $1.0 billion from its 13F filings, Wildcat Capital returned 31% in the second quarter alone and was up by 99.5% in the first six months of 2017. Moreover, Wildcat’s picks generated a weighted average return of 118% during the last four quarters, according to our estimates.
This shows that if a smaller investor followed Wildcat Capital’s stock picks, they would’ve outperformed the market by a huge margin. In fact, in May we published an article where we discussed the fund and its stellar 52% first-quarter return. Judging by its similarly strong performance during the second-quarter, it’s not too late to jump in and look into Wildcat’s investments.
Wildcat is one of the funds that we follow at Insider Monkey and our readers can get real-time email alerts whenever the fund reports changes to its portfolio via 13D/13G filings, including new investments, which can imitated the same day. To do that, you just have to sign up on Insider Monkey and add Wildcat to your follow list. In addition, you will get access to Wildcat’s equity portfolio, as well as any other articles that we publish about the fund. Moreover, we track over 600 other hedge funds and large investors, many of which also provide lots of interesting investment opportunities.
David Bonderman made the news earlier this year when he resigned from Uber’s board of directors over sexist comments made during a company meeting, which ironically was about sexual harassment, sexism and inclusion. When his fellow board member Arianna Huffington said that “there is a lot of data that shows when there’s one woman on the board it’s much more likely that there will be a second woman on the board,” Bonderman replied: “Actually what it shows is that it’s much more likely to be more talking.” The comment, while probably intended as humorous, drew a lot of criticism and Bonderman resigned within hours of making the comment, also issuing a statement in which he said that the comment was “careless, inappropriate, and inexcusable.” Bonderman had served on Uber’s board for four years after TPG Capital invested in the company.
Prior to the Uber incident, Bonderman also appeared in the public spotlight in 2012, when he threw himself a lavish birthday party at the Wynn Resort in Las Vegas. The party was attended by around 700 guests and had Paul McCartney as a surprise guest, as well as late comedian Robin Williams. A decade earlier, Bonderman had a similarly lavish 60th birthday at the Hard Rock Hotel and Casino in Vegas, where The Rolling Stones performed.
Head to the next page for more on Wildcat Capital as well as a look at their most enticing investment.
Bonderman’s family office, Wildcat Capital, is led by Leonard A. Potter, who has served as President and CEO of the fund since its inception in 2011. Potter is also the CEO of Infinity Q Capital, an investment advisor launched by Wildcat in 2014. Prior to joining Wildcat, Potter had worked as a consultant to billionaire George Soros’ Soros Fund Management since 2008, which he joined after having worked as a Managing Director at Soros’ Soros Private Equity since 2005. Potter has a long resume of key management positions at many financial companies and is a board member on several public and private companies.
As stated earlier, little is known about Wildcat’s investment process aside from its publicly disclosed positions with the Securities and Exchange Commission. However, last year, the fund went activist, in a very rare move for a family office. Wildcat issued a letter to the board of Sorrento Therapeutics, accusing the board and management of destroying shareholder value. The investor, which held 6.5% of the company’s stock at the time (it currently holds around 5.3%), said that the company’s board and management had engaged in “egregious and improper self-dealing and are squandering the Company’s assets.”
At the end of June, Wildcat Capital held an equity portfolio worth $376.14 million, according to its latest 13F filing. What’s worth pointing out is that Wildcat’s stellar returns are mainly due to a single investment: Kite Pharma Inc (NASDAQ:KITE). The company, in which Wildcat owns 2.41 million shares, represents the fund’s largest holding, worth $249.85 million and amassing 66.4% of its equity portfolio’s value. Kite Pharma Inc (NASDAQ:KITE), a $10.2 billion biotech focused on cancer immunotherapy, has seen its stock surge by nearly 300% since the beginning of the year. Wildcat has held shares of Kite Pharma Inc (NASDAQ:KITE) since the fourth quarter of 2014. The stock surged on the back of positive data from its drug trials, and more recently, following the announcement that the company will be acquired by Gilead Sciences (NASDAQ:GILD).
Wildcat Capital is not the only fund tracked by us to benefit from Kite Pharma Inc (NASDAQ:KITE)’s strong stock growth. During the second-quarter, the number of investors in our database that were bullish on the company went up by five to 30. Among the newcomers were Kurt Von Emster’s VenBio Select Advisor and Andreas Halvorsen’s Viking Global, which added 806,750 shares and 480,155 shares, respectively.
Even though Kite Pharma Inc (NASDAQ:KITE) might represent a forgone investment opportunity, since it won’t move much from the $180 level (the offer price from Gilead), it only underlines why it can be useful to follow funds like Wildcat.