Artisan Partners, a high value-added investment management firm, published its “Artisan Value Fund” second quarter 2021 investor letter – a copy of which can be downloaded here. A return of 7.77% was recorded by its Investor Class: ARTLX, 7.81% by its Advisor Class: APDLX, and 7.87% by its Institutional Class: APHLX for the second quarter of 2021, all beating the Russell 1000® Value Index that delivered a 5.21% return, but below the Russell 1000® Index that gained 8.54% for the same period. You can take a look at the fund’s top 5 holdings to have an idea about their top bets for 2021.
In the Q2 2021 investor letter of Artisan Partners, the fund mentioned Blackstone Inc. (NYSE: BX) and discussed its stance on the firm. Blackstone Inc. is a New York, New York-based alternative investment management company with a $90.3 billion market capitalization. BX delivered a 95.09% return since the beginning of the year, while its 12-month returns are up by 153.13%. The stock closed at $125.82 per share on September 22, 2021.
Here is what Artisan Partners has to say about Blackstone Inc. in its Q2 2021 investor letter:
“Top contributors included The Blackstone Group. Investment stalwart Blackstone Group’s virtuous cycle is in full swing. Throughout Blackstone’s history, excellent investment performance and capital protection have allowed the firm to increase fundraising in existing verticals as well as launch new endeavors. Historically, less than 10% of assets under management matures in any given year, and that number should move lower with continued growth in perpetual capital vehicles. Blackstone’s A+ rated balance sheet and capital-light model are the backbone of its 85% of cash flow distribution policy via a variable quarterly dividend.”
Based on our calculations, Blackstone Inc. (NYSE: BX) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. BX was in 54 hedge fund portfolios at the end of the first half of 2021, compared to 49 funds in the previous quarter. Blackstone Inc. (NYSE: BX) delivered a 26.99% return in the past 3 months.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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Disclosure: None. This article is originally published at Insider Monkey.
