Vulcan Value Partners, an investment management firm, published its “Large Cap, Small Cap, Focus Composite, Focus Plus Composite, and All Cap Composite” third quarter 2021 investor letter – a copy of which can be downloaded here. Vulcan’s Large Cap Composite Fund delivered a 0.1% net return for the third quarter of 2021, 11.8% for the Small Cap, -0.9% for the Focus Composite Fund, -0.9% return was delivered by the Focus Plus Composite Fund, and 3.4% was gained by the All Cap Composite Fund for the same period. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.
Vulcan Value Partners, in its Q3 2021 investor letter, mentioned Upstart Holdings Inc. (NASDAQ: UPST) and discussed its stance on the firm. Upstart Holdings Inc. is a San Mateo, California-based consumer lending company with a $16.8 billion market capitalization. UPST delivered an impressive 405.19% return since the beginning of the year and it closed at $207.60 per share on November 25, 2021
Here is what Vulcan Value Partners has to say about Upstart Holdings Inc. in its Q3 2021 investor letter:
“We purchased Upstart Holdings Inc., and it was also a material contributor during the quarter. Upstart is an artificial intelligence (AI) and cloud-based lending platform. Upstart’s customers, banks and institutional investors, are able to make more profitable loans utilizing Upstart’s software. The company uses over 1600 variables in its AI models, and its platform underwrites superior loans with higher approval rates, lower default rates, and lower interest rates for consumers compared to alternative lending sources. As former owners of FICO, we believe Upstart has the potential to be the FICO of the 21st century. The company has a virtuous circle that is constantly strengthening its competitive position. Upstart’s AI based methodology is more accurate than conventional underwriting and FICO scores alone, and it is expanding financial services profitably to the underbanked and the unbanked. In turn, customers allocate more loans to Upstart. Increased loan volume creates more data which improves the AI-based lending platforms’ accuracy, resulting in even more volume flowing to Upstart. We purchased Upstart in our Small Cap portfolio in the fourth quarter of 2020, and since then it has grown into a large cap company with a current market cap of approximately $26 billion. Its value has compounded more rapidly than we ever could have modeled. We are pleased to purchase Upstart in our Large Cap portfolio, and we are pleased with the initial results; however, we are more excited about its long-term prospects.”
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Based on our calculations, Upstart Holdings Inc. (NASDAQ: UPST) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. UPST was in 23 hedge fund portfolios at the end of the third quarter of 2021, compared to 21 funds in the previous quarter. Upstart Holdings Inc. (NASDAQ: UPST) delivered a -4.22% return in the past 3 months.
Disclosure: None. This article is originally published at Insider Monkey.
