Lee Ainslie: Washington Commanders and Other Investments
In this article, we discuss Lee Ainslie's Washington Commanders and other investments. If you want to see more stocks in his portfolio, check out Top 5 Stocks in Lee Ainslie’s Portfolio.
Lee Ainslie is the face and the brains behind Maverick Capital, a high-profile hedge fund with a net worth of about $4 billion. Founded in 1993, the hedge fund primarily invests in stocks while staying clear of bonds, commodities, currencies, and options. Some of its notable holdings are in tech giants, including Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corporation (NASDAQ:MSFT), and NVIDIA Corporation (NASDAQ:NVDA), which have helped reinvigorate the hedge fund's fortunes in recent months.
Ainslie's bio is one that speaks volumes in addition to being the managing partner of Maverick Capital. Before founding the hedge fund in 1993, he was the managing director of Tiger Management. He also serves on the boards of Robin Hood Foundation and the Economic Club of New York. Lee Ainslie wife is Elizabeth Ainslie.
The father of two, Ainslie has made a name for himself as a pure long/short equity investor. He primarily focuses on stocks he thinks will beat the market and sells those he thinks will underperform. Over the years, the hedge fund manager has beaten the S&P 500 by 6% to 7% percentage points with 50% less volatility. Lee Ainslie net worth of over $1B stems from stellar performance of Maverick Capital hedge fund with bets on Salesforce Facebook and Meta all of which have exploded in 2023.
However, Ainslie had a first quarter to forget as Maverick Capital fell into the red, losing 22.9% compared to a 4.6% gain of the S&P 500. One key factor behind the massive loss is the hedge fund's significant holding in Coupang, which accounted for nearly two-thirds of the losses. The hedge fund's fortunes were also hurt by its biotech stocks holdings that remained under pressure.
According to Ainslie, a decline in dollar volume M&A activity in the biotech sector hurt the segment as the impact of discount rates on valuation multiple also fueled the weakness. Fast forward, the hedge fund appears to have found its footing thanks to Ainslie's solid stock picks, especially in the tech space.
Investments in Amazon, Nvidia, Netflix, and Microsoft should help offset losses in other sectors as the tech stocks have posted double-digit gains amid the AI boom. In addition to betting big on tech giants, Ainslie is going short on housing and durable stocks as he does not expect spending on home improvements or furnishing to assume growth to the elevated levels recorded in 2021.
In addition to shorting housing and durable stocks, Ainslie initiated a new position in Masimo Corporation (NASDAQ:MASI) in the first quarter of 2022, a high-quality, high-growth company on the right side of changes in healthcare. According to Ainslie, Masimo is a clear leader in pulse oximetry, a duopoly segment with contracts running five to seven years. Masimo products outperform those of its peers, resulting in better patient outcomes and lower patient costs. Therefore, the company boasts a solid recurring revenue base of 80% with an average customer retention rate of 98%.
In Q1 2023, Maverick Capital's portfolio value declined from $4.22 billion to $3.95 billion. The fund added 194 new stocks, boosted its holdings in 157 stocks, sold off 122 stocks, and reduced its exposure in 94 stocks. Ainslie’s favored consumer discretionary stocks, which made up 43.47% of the portfolio, followed by information technology stocks, which accounted for 20.22% of the portfolio in the first quarter of 2023. Some of the fund's largest positions are Block, Inc. (NYSE:SQ), Amazon.com, Inc. (NASDAQ:AMZN), and Uber Technologies, Inc. (NYSE:UBER). Based on these economic trends, we reveal our top 10 picks from Lee Ainslie’s Maverick Capital portfolio.
Ainslie's house in Old Brookville, New York is one of his assets having diversified his holdings beyond the stock market. Ainslie was part of a consortium led by Apollo Global Management co-founder Josh Harries that acquired NFL's Washington Commanders for $6 billion. Other high-profile personalities that were part of the Lee Ainslie Commander deal included billionaire Mitch Rales, Blackstone Inc. executive David Blitzer, former Google CEO Eric Schmidt, and NBA legend Earvin Johnson.
Our Methodology
Ainslie has made a name for himself in managing more assets than 66% of other hedge fund managers on Wall Street. His holdings through the Maverick Capital hedge fund span various segments, from consumer discretionary to the tech and semiconductor industry. While ranking his top investments, we focused on Maverick Capital's biggest holdings.
Lee Ainslie Top Holdings
10. Netflix Inc (NASDAQ:NFLX)
Number of Hedge Fund Holders: 108
Maverick Capital % Portfolio: 2.12%
Netflix Inc (NASDAQ:NFLX) sums up Maverick Capital's top ten investments in the equity market, diversifying the hedge fund portfolio into the world of content creation and streaming. The company’s fortunes have improved significantly in 2023, having added 5.9M subscribers in Q2 and earnings coming in at $3.29 a share against the $2.86 expected. Its revenue totaled $8.2 billion.
In addition to solid financial results, the streaming giant stock is up 62%, outperforming the overall market. Likewise, the stock accounts for 2.12% of Maverick's capital portfolio. On July 20, John Blackledge, an analyst at TD Cowen, maintained a Buy rating on Netflix Inc (NASDAQ:NFLX) and increased the stock's target price from $500 to $515.
In the first quarter of 2022, 108 hedge funds had a stake in Netflix Inc (NASDAQ:NFLX) compared to 117 in the previous quarter. In Q1, the company’s biggest hedge fund holder, Eagle Capital Management owned 4.27 million shares of the company worth $1.47 billion.
Netflix Inc (NASDAQ:NFLX) is among the stocks that Lee Ainslie holds in his portfolio, along with Block, Inc. (NYSE:SQ), Amazon.com, Inc. (NASDAQ:AMZN), and Uber Technologies, Inc. (NYSE:UBER).
In the investor letter for the second quarter of 2023, Artisan Partners made the following comment about Netflix, Inc. (NASDAQ:NFLX):
“Top contributors to performance for the quarter included global streaming giant Netflix, Inc. (NASDAQ:NFLX). Netflix benefited from the success of the new ad tier that allows users to access the service at a lower price, and from the paid sharing initiative that allows multiple users to share an account for an additional fee.”
9. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 289
Maverick Capital % Portfolio: 2.21%
Microsoft Corporation (NASDAQ:MSFT) is one stock offering Ainslie with Maverick Capital exposure to software services and solutions design, development, and licensing. The tech giant has carved a niche in offering an array of software solutions that power various work operations. It is also big in gaming with Xbox and a big player in cloud computing. In the recent past, Microsoft has increased investment in artificial intelligence to strengthen its competitive edge in various segments further.
While accounting for about 2.21% of Maverick Capital's portfolio, Microsoft Corporation (NASDAQ:MSFT) is up by about 58% year to date. DA Davidson's Gil Luria kept a Buy rating on Microsoft Corporation (NASDAQ:MSFT) and boosted the stock's target price from $350 to $415 on July 21. The firm said that the company is one of the most attractive stories in the Tech sector, as its AI leadership drives more momentum.
Among the hedge funds tracked by Insider Monkey, 289 hedge funds had a stake in Microsoft Corporation (NASDAQ:MSFT) in the first quarter of 2023. Their combined stake value was $57.91 billion. In the previous quarter, 259 hedge funds had a stake worth $58.66 billion in the company.
The Wedgewood Partners commented on Microsoft Corporation (NASDAQ:MSFT) in its investor letter for the second quarter 2023:
“Microsoft Corporation (NASDAQ:MSFT) also contributed to performance during the quarter. Revenues grew +10% (foreign exchange adjusted) whereas operating income grew +14%, helped by +18% growth in Office365 and 31% growth in Azure and other cloud services. Although the Company guided to a deceleration in its core businesses, Microsoft has ample opportunity to drive attractive double-digit growth over a multi-year timeframe. We recognize investors have disproportionately favored software and tech stocks year to date, driving multiples to relative and historical highs. As a result, we paired some of our weighting in Microsoft earlier in the year; however, it remains a core position in portfolios.”
8. Uber Technologies Inc (NYSE:UBER)
Number of Hedge Fund Holders: 144
Maverick Capital % Portfolio: 2.3%
Maverick Capital has also diversified its holdings into the ride-hailing business with an investment in Uber Technologies Inc. (NYSE:UBER). The company develops and operates technology applications focusing on areas of mobility, delivery, and freight. Consequently, it offers ridesharing and car-sharing services. Its delivery business allows people to order food from restaurants and have delivered to their homes. The company is fresh from entering a global agreement with Domino Pizza to see US customers order Domino's products through Uber Eats and Postmates apps and deliver them.
Uber Technologies Inc. (NYSE:UBER) stock is up by more than 80% for the year as it benefits from booming business in its food delivery and ride-sharing services. Likewise, Maverick Capital has seen its investments increase in value as the stock accounts for 2.3% of the portfolio. Tigress Financial initiated coverage of Uber Technologies Inc. (NYSE:UBER) with a ‘Buy’ rating and a $66 target price on July 21.
Our hedge fund data shows 144 funds long Uber Technologies Inc (NYSE:UBER) in the first quarter. Their total stake value in the company was $5.67 billion. Altimeter Capital Management is a prominent stakeholder of the company, with 13.34 million shares worth $422.77 million.
RiverPark Advisors made the following comment about Uber Technologies, Inc. (NYSE:UBER) in its Q1 2023 investor letter:
“Uber Technologies, Inc. (NYSE:UBER): Uber was a top contributor in the quarter following better-than-expected 4Q results and 1Q guidance. Gross Bookings grew 19% year over year to $31 billion, driven by 31% Mobility Gross Bookings growth and 6% Delivery Growth Bookings growth. 4Q Adjusted EBITDA of $665 million, up $579 million year over year, significantly beating management’s $600-$630 million guidance. Management guided to continuing growth in 1Q for Gross Bookings (20%- 24% growth) and Adjusted EBITDA (of $660-$700 million).
UBER remains the undisputed global leader in ride sharing, with a greater than 50% share in every major region in which it operates. The company is also a leader in food delivery, where it is number one or two in the more than 25 countries in which it operates. Moreover, after a history of losses, the company is now solidly profitable with the potential for substantial margin expansion and free cash flow generation to come. We view UBER as more than just ride sharing and food delivery, but also as a global mobility platform with the ability to sell to its 131 million users (by comparison, Amazon Prime has 200 million members) and penetrate new markets of on-demand services, such as package and grocery delivery, travel, truck brokerage (the company had $1.5 billion in Freight revenue for 4Q22), and worker staffing for shift work. Given its $4 billion of unrestricted cash and $5 billion of investments, the company today has an enterprise value of $70 billion, indicating that UBER trades at 1.6x next year’s estimated revenue.”
7. Jones Lang LaSalle Inc (NYSE:JLL)
Number of Hedge Fund Holders: 28
Maverick Capital % Portfolio: 2.41%
Jones Lang LaSalle Inc (NYSE:JLL) is a professional service company that offers real estate and investment management services worldwide. Some of its services include agency leasing, tenant representation, property management, and consulting services. Despite the US housing market challenges, the company delivered solid Q1 results, with revenues up 1% to $4.7 billion as fee revenue came in at $1.6 billion, down 15% in local currency.
While the stock was under immense pressure in the first half of the year, it is up by about 5.5% year to date and accounts for about 2.41% of Maverick Capital Holding. However, the consensus rating for Jones Lang LaSalle Inc (NYSE:JLL) is a Hold.
In the first quarter of 2023, 28 hedge funds had a stake in Jones Lang LaSalle Inc (NYSE:JLL) compared to 26 in the previous quarter. In Q1, the company’s biggest hedge fund holder, Generation Investment Management owned 4.38 million shares of the company worth $637.59 million.
In its Q1 2023 investor letter, Baron Funds mentioned Jones Lang LaSalle Incorporated (NYSE:JLL) positively.
“Jones Lang LaSalle Incorporated (NYSE:JLL) is one of the leading commercial real estate services firms in the world with scale, product breadth, and leadership positions across its diversified real estate business segments. Its P/E multiple is less than 9 times 2024 earnings versus its long-term average P/E multiple of 14 times.…” (Click here to read full text)
6. Workday Inc (NASDAQ:WDAY)
Number of Hedge Fund Holders: 86
Maverick Capital % Portfolio: 2.5%
Maverick Capital's diversified portfolio also includes stakes in Workday Inc. (NASDAQ:WDAY), a provider of enterprise cloud applications that helps companies to staff, organize and pay their workforce. The company deals in applications that help customers plan, execute and monitor other applications and environments. The stock has been in fine form, rallying by more than 30% year to date amid improved consumer spending on cloud applications. The company delivered solid Q1 2023 results, with revenues increasing 17.4% to $1.68 billion. Adjusted net income grew 57% to $342 million.
Workday stock accounts for about 2.5% of the Workday portfolio. JPMorgan maintained an Overweight rating on Workday Inc. (NASDAQ:WDAY) and lifted the stock's target price from $223 to $240 on July 17.
At the end of the first quarter of 2023, 86 hedge funds owned a stake in Workday Inc (NASDAQ:WDAY), up from 83 in the preceding quarter. Stephen Mandel's Lone Pine Capital was the largest shareholder of Workday, Inc. (NASDAQ:WDAY) with a significant stake valued at $881 million.
Just like Block, Inc. (NYSE:SQ), Amazon.com, Inc. (NASDAQ:AMZN), and Uber Technologies, Inc. (NYSE:UBER), Workday, Inc. (NASDAQ:WDAY) is one of the stocks in Lee Ainslie’s portfolio.
Click to continue reading and see Top 5 Stocks in Lee Ainslie’s Portfolio.
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Disclosure: None. Lee Ainslie Washington Commanders and Other Investments is originally published on Insider Monkey.