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A report from The Wall Street Journal on Tuesday reported hedge fund Coltrane Asset Management is up 223% this year through June.
The report states that people familiar with the matter told the WSJ the fund is up several hundred million dollars, one of the most significant percentage gains this year by a hedge fund.
Coltrane’s founder Mandeep Manku made a large contrarian bet in late 2020, according to the report. After being struck by the Covid-19 pandemic and the resulting plunge, he changed Coltrane’s portfolio from preferring cheap European companies to betting against tech and fast-growing US companies.
While growth-focused hedge funds recorded losses and companies slashed valuations, Coltrane profited. The fund benefitted from declines in the share prices of companies such as Peloton (NASDAQ:PTON), Netflix (NASDAQ:NFLX), Meta (NASDAQ:META), Rivian (NASDAQ:RIVN), and Roblox (NYSE:RBLX).
In addition, the WSJ source told them that a position against Carvana Co (NYSE:CVNA), a used-car website, has contributed 9 percentage points of the gains, with its stock plunging over 90% this year.
Manku’s fund was said to have held the trade for two years, adding to the position and cycling companies in and out of the trade, placing bearish options bets. However, they have now reportedly locked in most of their gains, going overall long again, although they have some bets against growth stocks.
