RiverPark Funds, an investment management firm, published its “RiverPark Large Growth Fund” second quarter 2021 investor letter – a copy of which can be downloaded here. The RiverPark Large Growth Fund (the “Fund”) returned 13.1% for the second quarter of 2021, while its benchmarks, the S&P 500 Total Return Index (“S&P”) advanced 8.5%, the Russell 1000 Growth Total Return Index (“RLG”) returned 11.9%, while the Russell 1000 Value Total Return Index returned 5.2%. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.
In the Q2 2021 investor letter of RiverPark Funds, the fund mentioned The Blackstone Group Inc. (NYSE: BX), and discussed its stance on the firm. The Blackstone Group Inc. is a New York, New York-based alternative investment management company, that currently has an $82.3 billion market capitalization. BX delivered a 76.35% return since the beginning of the year, extending its 12-month returns to 117.61%. The stock closed at $114.29 per share on August 06, 2021.
Here is what RiverPark Funds has to say about The Blackstone Group Inc. in its Q2 2021 investor letter:
“Following strong first quarter results, Blackstone, our alternative asset manager, was our top contributor for the second quarter. BX continues to grow recurring revenues, with fee-related earnings up 58% year over year, as well as AUM, up 21% year over year to $649 billion.
Blackstone (as well as our other alternative asset managers Apollo and KKR) may at times face near-term mark-to-market headwinds and temporary slowdowns in investment realizations, but most of their fees (which are high-margin and recurring) are not sensitive to the market, most of its capital is long-dated or even permanent, and the company has billions of uninvested capital available to put to work (BX has $148 billion of “dry powder” or uncalled capital commitments). This combination of recurring fees plus opportunistic investing and harvesting offers a base of consistent earnings, plus the opportunity to maximize both fund performance and incentive fees, providing a strong foundation for long-term stock performance.”
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Based on our calculations, The Blackstone Group 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 49 hedge fund portfolios at the end of the first quarter of 2021, compared to 54 funds in the fourth quarter of 2020. The Blackstone Group Inc. (NYSE: BX) delivered a 26.93% 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.
