Lone Pine Capital’s hedge fund, up 44% this year through June, has lost nearly all those gains in the last quarter due to wrong-way stock bets and short wagers.
Its Cypress hedge fund is now up just 0.6% this year through September, according to people familiar with the matter. The fund tumbled nearly 25% in July alone, before posting additional losses in subsequent months, resulting in a roughly 30% decline in the third quarter, the people said, requesting anonymity discussing fund performance.
Several of Lone Pine’s biggest wagers, such as Nebius Group NV, ASML Holding NV and Home Depot Inc. tumbled significantly, while some of its medium-sized positions like MasTec Inc., AppLovin Corp. and Corning Inc. plunged even more, according to an analysis of the firm’s June 30 regulatory filings. The hedge fund’s short bets added to the losses.
A rapid selloff in AI and tech stocks in July, compounded by geopolitical tensions with Iran and surging oil prices, prompted a broader market rout that month, whipsawing a multitude of hedge funds .
Lone Pine’s long-only fund — which houses about 75% of the firm’s $19 billion - also struggled, but fared comparatively better. The fund was up nearly 39% this year through June, before losses pushed that gain down to 6.7% as of September, one of the people said.
A representative for the firm declined to comment. Returns for both funds reflect only stock portfolios and exclude any private investments. Institutional Investor earlier reported the performance.
It’s a surprising reversal for Stephen Mandel’s firm, which has posted three steady years of double-digit gains. Unlike other stock-picking peers, Lone Pine has less exposure to traditional AI-related stocks. Instead, it focuses more on industrials, consumer staples, financials, healthcare and materials companies.
One of the firm’s long-tenured chief investment officers, Kelly Granat, is leaving to join Gavin Baker’s Atreides Management, which makes bigger bets on public and private tech companies. Lone Pine’s remaining co-CIOs are David Craver and Rahul Anne.
