VGI Partners Global Investments Limited, an investment management company, released its 2022 annual investor letter. A copy of the same can be downloaded here. The firm returned -22.3% (net) for the year ended 31st December 2022. 2022 was a challenging year for the global equity market, the S&P 500 declined -19% during the period, the NASDAQ Composite retreated -33%, and the MSCI World Index fell -19% in the same period. In addition, please check the fund’s top five holdings to know its best picks in 2022.
VGI Partners highlighted stocks like IAC Inc. (NASDAQ:IAC) in its Q4 2022 investor letter. Headquartered in New York, New York, IAC Inc. (NASDAQ:IAC) is a global media and internet company. On March 31, 2023, IAC INC. (NASDAQ:IAC) stock closed at $51.60 per share. One-month return of IAC INC. (NASDAQ:IAC) was -4.41%, and its shares lost 51.08% of their value over the last 52 weeks. IAC INC. (NASDAQ:IAC) has a market capitalization of $4.586 billion.
VGI Partners made the following comment about IAC INC. (NASDAQ:IAC) in its 2022 annual investor letter:
“IAC INC. (NASDAQ:IAC)was another key detractor during the year, as we made the mistake of holding onto our investment for too long. A key part of our original IAC thesis was underpinned by a near-term catalyst in the form of an upcoming spin-off (Vimeo) providing a chance to crystallise value and for the business to narrow the discount to its sum-of-the-parts. While this thesis played out, we then held onto our IAC investment, thinking the business continued to trade at a meaningful discount to the value of the assets it owned. We failed to appreciate that IAC was entering a ‘re-build’ stage and, given the lack of upcoming spin-offs, would continue to trade at a deep discount to the value of its net assets.
In addition, IAC undertook a meaningful acquisition (Meredith), which is a business complementary to one of its existing assets (Dotdash). This increased IAC’s exposure to the advertising market (Dotdash & Meredith generate all revenues through advertising) at a time when the ad market was starting to slow. We made the mistake of not realising quickly enough that the integration of the two businesses was taking longer and facing some hiccups, which, in turn, caused management to delay its financial targets. One of IAC’s other businesses, Angi, similarly faced issues with its strategic direction, leading to management changes and the IAC CEO having to step in to turn around the business. Overall, a key mistake we made was failing to appreciate that investments relying on sum-of-the-parts valuations tend to perform poorly in weaker market conditions when investors demand a larger discount versus the net asset value – unless there is a clear path to unlock value (e.g. through a spin-off). We continue to own IAC as we believe that the management team are now addressing the recent issues appropriately and that their actions can assist with closing the large discount to net assets over time.”
IAC INC. (NASDAQ:IAC) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 54 hedge fund portfolios held IAC Inc. (NASDAQ:IAC) at the end of the fourth quarter which was 45 in the previous quarter.
We discussed IAC INC. (NASDAQ:IAC) in another article and shared TimesSquare U.S. Mid Cap Growth Strategy’s views on the company. In addition, please check out our hedge fund investor letters Q4 2022 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
