As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about GCM Grosvenor Inc. (NASDAQ:GCMG).
GCM Grosvenor Inc. (NASDAQ:GCMG) has seen an increase in hedge fund interest in recent months. GCM Grosvenor Inc. (NASDAQ:GCMG) was in 24 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 17. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 17 hedge funds in our database with GCMG holdings at the end of March. Our calculations also showed that GCMG isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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Matthew Drapkin of Becker Drapkin Management
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Do Hedge Funds Think GCMG Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of 41% from the previous quarter. The graph below displays the number of hedge funds with bullish position in GCMG over the last 24 quarters. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
Among these funds, Royce & Associates held the most valuable stake in GCM Grosvenor Inc. (NASDAQ:GCMG), which was worth $60 million at the end of the second quarter. On the second spot was Adage Capital Management which amassed $51.5 million worth of shares. Schonfeld Strategic Advisors, Millennium Management, and Marshall Wace LLP were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Becker Drapkin Management allocated the biggest weight to GCM Grosvenor Inc. (NASDAQ:GCMG), around 2.32% of its 13F portfolio. Gillson Capital is also relatively very bullish on the stock, earmarking 0.72 percent of its 13F equity portfolio to GCMG.
As aggregate interest increased, key money managers have been driving this bullishness. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, initiated the most valuable position in GCM Grosvenor Inc. (NASDAQ:GCMG). Marshall Wace LLP had $12.7 million invested in the company at the end of the quarter. Matthew Drapkin and Steven R. Becker’s Becker Drapkin Management also initiated a $7.9 million position during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace’s Marshall Wace LLP, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, and Renaissance Technologies.
Let’s go over hedge fund activity in other stocks similar to GCM Grosvenor Inc. (NASDAQ:GCMG). These stocks are Park National Corporation (NYSE:PRK), HNI Corp (NYSE:HNI), ADC Therapeutics SA (NYSE:ADCT), Tellurian Inc. (NASDAQ:TELL), Granite Construction Incorporated (NYSE:GVA), Tanger Factory Outlet Centers Inc. (NYSE:SKT), and Ranpak Holdings Corp (NYSE:PACK). All of these stocks’ market caps resemble GCMG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PRK | 6 | 3844 | 1 |
| HNI | 15 | 47240 | 3 |
| ADCT | 8 | 239702 | 0 |
| TELL | 17 | 103275 | 5 |
| GVA | 14 | 32797 | 1 |
| SKT | 14 | 51022 | -1 |
| PACK | 17 | 838597 | 3 |
| Average | 13 | 188068 | 1.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $188 million. That figure was $213 million in GCMG’s case. Tellurian Inc. (NASDAQ:TELL) is the most popular stock in this table. On the other hand Park National Corporation (NYSE:PRK) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks GCM Grosvenor Inc. (NASDAQ:GCMG) is more popular among hedge funds. Our overall hedge fund sentiment score for GCMG is 90. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks returned 24% in 2021 through October 22nd but still managed to beat the market by 1.6 percentage points. Hedge funds were also right about betting on GCMG as the stock returned 11.5% since the end of June (through 10/22) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
