Maverick Capital Lost 11% in August

Maverick Capital lost 11% in August according to an article by Katya Wachtel and Svea Herbst-Bayliss (Katya Wachtel used to write at Business Insider until recently). The article initially mentions a 23% loss figure for one of Maverick Capital’s levered funds which makes sense. If you have a levered fund, then the gains and losses will be amplifies. If someone borrowed money and invested twice as much in Maverick’s levered fund, then their loss would have been 46%. That’s why we should focus on Maverick Capital’s flagship fund.

Maverick Capital’s flagship fund lost 11% in August and the article says Lee Ainslie’s losses in Chinese company Youku is the main culprit. Maverick Capital had $10.4 billion in U.S. equities in its 13F portfolio at the end of June. We will take a look at Maverick Capital’s performance assuming that Lee Ainslie didn’t change his holdings. First of all the stocks in his 13F portfolio lost 8.4% in August, vs. a loss of 5.1% for the SPY. This means he made other bets since the end of June which made his performance even worse.

The top losing position in Maverick Capital’s 13F portfolio is really Youku (YOKU): $96.4 million. Maverick Capital also lost $96.3 million from its Citigroup (C) bets. So, the amount of losses are almost identical. Reuters should have said the losses in Youku and Citigroup contributed the most to Maverick Capital’s losses. In terms of percentage loss, the biggest losing position is not surprisingly Longtop Financial. I bet you weren’t expecting this. Maverick Capital had 4.98 Million shares of LFT at the end of June. Do you remember the huge fraud at LFT? The stock wasn’t trading at the time, so Maverick Capital valued that position at $20.3 million. Unfortunately, the stock started trading in August and closed at a whooping $0.42 per share on August 31st. This means Maverick Capital’s loss from Longtop Financial in August is more like 90%.

Maverick Capital also lost 49.2% in Camelot Information Systems (CIS), 36.7% in Bluefly (BFLY), 36.4% in PACB, and 32.5% in Vanceinfo (VIT). Last week Maverick Capital disclosed that it bought 20K shares in BFLY. The stock was trading below $2 per share, so we don’t understand why Maverick Capital even bothered to buy such a small amount in this tiny company (check out Maverick Capital’s entire 13F portfolio).

Maverick Capital returned around 12% since its inception in 1995. This year it is underperforming the market. Maverick Capital lost 10% through August.