We recently compiled a list of $3 Billion Hedge Fund’s Top 10 Stock Bets. In this article, we are going to take a look at where Snowflake Inc. (NYSE:SNOW) stands against the other stock bets of a $3 billion hedge fund.
Cinctive Capital Management is a hedge fund specializing in long/short equity strategies. Based in New York City’s Hudson Yards, its founders and industry veterans, Richard Schimel and Larry Sapanski, aim to redefine the multi-manager model with an evolved approach to portfolio management. The firm provides a multi-manager investment platform to its investors combining fundamental stock picking with proprietary quantitative tools with a focus on scrupulous risk management practices to ensure robust investment strategies. According to Schimel, “Cinctive is the evolution of the experiences Larry and I had over the past two decades.”
Richard Schimel and Lawrence Sapanski founded Cinctive Capital Management in 2019. Since its inception, the hedge fund’s assets have nearly quadrupled. Sapanski and Schimel have worked together for 14 years. Back in 2005, Larry also co-founded Diamondback Capital, managing significant assets in financials, energy, bonds, and macro strategies. In the early 2000s, Rich Schimel and Lawrence Sapanski worked for Steve Cohen’s SAC Capital Advisors. They founded Diamondback Capital Management in 2005, which managed $5.8 billion in assets. However, the firm closed in 2012 due to client withdrawals following a non-prosecution agreement related to an insider trading investigation. However, the government later dropped the agreement and Diamondback was refunded the $9 million after the conviction was tossed out.
In addition to managing and founding Cinctive Capital Management and the aforementioned ventures, both the Co-Founders and Co-CIOs have held many distinctive roles in the past. Richard Schimel was a Senior Managing Director and Head of Aptigon Capital at Citadel. He also served as Chief Investment Officer at Sterling Ridge Capital Management, which he founded in 2013. Schimel holds a B.A. in Economics from the University of Michigan. Larry Sapanski also brings over 30 years of investment management experience to the Cinctive family. Larry Sapanski paved a similar path for himself like his fellow Richard Schimel before co-founding Cinctive. He started a hedge fund called Scoria Capital (2013-2017) where he served as CIO, overseeing trading, risk exposures, and a best ideas portfolio. Larry Sapanski has held various trading roles at London Bishopgates International, Lehman Brothers, Deutsche Bank, and Morgan Stanley. Sapanski graduated from St. John’s University with a B.S. in Accounting.
According to the Form ADV filed on March 2024, Cinctive Capital Management disclosed that they are serving 8 clients with discretionary assets under management totaling $3,019,428,000. Their most recent 13F filing for Q4 2023 revealed managed 13F securities amounting to $1,505,809,649, with a top 10 holdings concentration of 17.76%.
Currently, Cinctive Capital Management has been successful in betting on artificial intelligence in energy, technology, and utility sector-related stocks as it ended the first half of the year gaining 11%. Its performance has also been noteworthy while betting in other sectors such as Financials, healthcare, and biotech thereby beating other big multi-strategy hedge funds, such as Citadel and Millennium. The successful track record at Diamondback has allowed Rich Schimel and Lawrence Sapanski to draw noteworthy interest from institutional investors for their venture, Cinctive Capital Management. This achievement comes despite the broader hedge fund industry’s increased scrutiny from investors over subpar returns.
Our Methodology
Stocks mentioned in this article were picked from the investment portfolio of Cinctive Capital Management at the end of the first quarter of 2024. Schimel and Sapanski’s top 5 stock picks returned an average of 11% since the end of the first quarter, vs. 4% gain for the broader indices for large-cap stocks.
A software engineer at work, surrounded by a wall of computer monitors connected to a ‘Data Cloud’ platform.
Snowflake Inc. (NYSE:SNOW)
Return since Q1 End: -20.2%
Snowflake Inc. (NYSE:SNOW) is a cloud-based data platform for various organizations. Its AI data cloud is used by over 10,000 companies including Adobe, AT&T, HP, Mastercard, PepsiCo, Nielsen, Siemens, Yamaha, and US Foods, to name a few. Its Q1 product revenue grew 34% year over year to $790 million and expects full-year product revenue to reach $3.3 billion, up 24% year-over-year.
According to the Regulatory filings, Cinctive Capital Management owned 164,405 shares in Snowflake Inc. (NYSE:SNOW) at the end of the first quarter of 2024 worth over $26 million, representing 1.23% of the portfolio. Among the hedge funds being tracked by Insider Monkey, Altimeter Capital Management is a leading shareholder in Snowflake Inc. (NYSE:SNOW) with over 10 million shares worth $1.6 billion.
Alger Focus Equity Fund stated the following regarding Snowflake Inc. (NYSE:SNOW) in its Q1 2024 investor letter:
“Snowflake Inc. (NYSE:SNOW) is a cloud-based data warehousing company that allows organizations to store, analyze and share data in a secure. scalable and cost-effective manner. This includes the Data Cloud. an ecosystem where Snowflake customers, partners. data providers, and data consumers can break down data silos and derive value from rapidly growing data sets in a secure, governed, and compliant way. Its platform supports a range of use cases. including data warehousing, data lakes, data engineering, data science, data application development, and data sharing. While the company reported an overall healthy fiscal fourth quarter. shares detracted from performance after management lowered their fiscal 2025 forward revenue guidance below analyst estimates. Further, the company announced that CEO Frank Slootman would be retiring from the role immediately, succeeded by Sridhar Ramaswamy, the former SVP of Al who has demonstrated impressive speed in bringing new Al products and features to market.”
Overall SNOW ranks 7th on our list of the best stocks to buy according to a $3 billion hedge fund. You can visit $3 Billion Hedge Fund’s Top 10 Stock Bets to see the other stocks that are on hedge funds’ radar. While we acknowledge the potential of SNOW as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than SNOW but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.