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$21 billion fund manager D1 Capital Partners has made a comeback by riding the turnarounds of a handful of giants in Europe as the stock market in the region undervalues many of its large companies.
The company received 44% returns in its portfolio published last year, and the biggest drivers are German group Siemens Energy, British industrial company Rolls-Royce, Italy, according to a letter from a financial investor. It was born from an investment from the bank Unicredit. The era.
According to those familiar with the numbers, D1 Capital will continue these profits until 2025, earning a 7.7% net profit in January.
This return means D1 Capital recovers from a major loss in the 2022 heavy technology bet, with hedge funds surpassing the high water mark due to the “overwhelming majority” of investors. Until the client is all over again.
Based in New York, D1 is one of a group of prominent hedge funds such as Coatue Management and Tiger Global Management, building large private stakes in technology companies. They were hit hard in early 2022 as ratings of technology companies plummeted. Leading by veteran Viking global investor Daniel Sandheim, he pays tribute to the spirit of Amazon, where every day is “day first.”
D1 Capital makes money betting on turnarounds of well-known companies that are beginning to come true, mainly in Europe. Sundheim highlighted that CEO Tufan Erginbilgiç has new leadership at Rolls-Royce, where he is embarking on a cost-cutting drive, and that Andrea Orcel is embarking on Unicredit, which is exploring Europe.
Sundheim, who founded D1 in 2018, leads the company through inflection points. After suffering a sudden loss in 2022, the fund has hired several new employees to its investment team over the past few months.
In part, bets benefit from discounts traded by European companies groups compared to their US peers.
“We believe that there is a very attractive opportunity to buy great businesses that trade on non-AU exchanges at present. Companies with similar products, markets and growth prospects are You can trade with very different valuations,” he said, referring to lowering multiples of European revenue.
But that trend has begun to reverse since Donald Trump landed in the White House. The benchmark Stoxx Europe 600 index has increased by 5.7% compared to the Wall Street S&P 500.
However, D1 did not enjoy great benefits everywhere. The fund only earned 3.7% net profit last year among private holdings last year, the letter added. As the percentage of new deals and public lists remains restrained, investors struggle to pay cash from their positions as some assets remain packed.
The fund consists of approximately $8 billion and $12 billion in private investments in public holdings, said someone familiar with the portfolio. D1 Capital’s losses in 2022 were primarily concentrated on private investment.
The fund started in 2018 with a trend to place big bets on promising high-tech companies, but diversified into other sectors in the years that followed. Since then, he has built stocks in Silicon Valley Darlings such as SpaceX, Groq, Stripe and Ramp.
D1 Capital’s stock in Elon Musk’s aerospace company SpaceX has seen a surge in valuations since Trump’s election in November, but accounts for almost a third of its private portfolio. Musk’s company has since been valued at $3500 billion, but D1 Capital is not planning to sell its stake “despite very substantial inbound interest,” the letter said. I said that.
Sundheim’s fund was hit hard by a short squeeze of meme inventory, urging them to rethink the short bet, the FT reported at the time. However, the funds still remain short today, calling them “core parts of our business.”
He said these bets will be strengthened by rising stock volatility as they quickly sell more shares in the US market, as large hedge funds that use heavy leverage and sell quickly during recessions. I predicted that.
