1 Main Capital, a boutique investment firm, released its second-quarter 2023 investor letter. A copy of the same can be downloaded here. In the second quarter, the fund returned 7.5% (net) compared to a 5.2% return for the Russell 2000 Index and an 8.7% gain for the S&P 500. For the first half, the fund delivered 20.6% compared to 8.1% and 16.9% respectively for the benchmarks. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
1 Main Capital highlighted stocks like KKR & Co. Inc. (NYSE:KKR) in the second quarter 2023 investor letter. Headquartered in New York, New York, KKR & Co. Inc. (NYSE:KKR) is an equity and real estate investment firm. On July 21, 2023, KKR & Co. Inc. (NYSE:KKR) stock closed at $60.49 per share. One-month return of KKR & Co. Inc. (NYSE:KKR) was 13.94%, and its shares gained 16.01% of their value over the last 52 weeks. KKR & Co. Inc. (NYSE:KKR) has a market capitalization of $68.007 billion.
1 Main Capital made the following comment about KKR & Co. Inc. (NYSE:KKR) in its second quarter 2023 investor letter:
“As a leader in the alternative asset management space, KKR & Co. Inc. (NYSE:KKR) has seen tremendous growth in AUM from just shy of $200 billion when I first highlighted the company in the Fund’s Q2’19 letter, to over $500 billion today. Additionally, dry powder has grown from $60 billion back then to over $100 billion currently.
Importantly, many of KKR’s businesses remain subscale relative to their potential, including real estate, infrastructure, credit, Asia, and democratized products for high-net-worth individuals. Within a reasonable period, I believe KKR’s AUM can still grow several multiples relative to its current levels.
Currently, KKR’s realizations have slowed, meaning that performance and investment income have declined significantly, and there is very little visibility on when they may come back. However, these earnings are simply deferred rather than lost.
Reason for mispricing: During bull markets, investors fear owning levered beta into a potential downturn. During bear markets, the alts have very limited earnings visibility and fundraising slows meaningfully. As such, the alts continue to trade at low multiples despite consistently growing at attractive rates through multiple cycles.”
Image by Nattanan Kanchanaprat from Pixabay
KKR & Co. Inc. (NYSE:KKR) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 57 hedge fund portfolios held KKR & Co. Inc. (NYSE:KKR) at the end of first quarter which was 57 in the previous quarter.
We discussed KKR & Co. Inc. (NYSE:KKR) in another article and shared Greenhaven Road Capital’s views on the company. In addition, please check out our hedge fund investor letters Q2 2023 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.
