By Carolina Mandl
NEW YORK (Reuters) – Hedge funds piled into bets on financial stocks, Tesla (NASDAQ:) shares and a prison operator in the third quarter, filings showed, ahead of a rally following Donald Trump’s victory in the American presidential elections.
Many of the bets have become known as so-called Trump trades, corners of the market that were sometimes influenced by the Republican candidate’s fortunes before the election and saw gains after his victory.
Bridgewater Associates, Coatue Management and D1 Capital were among those who added shares of banks and other financial stocks, which have soared since Election Day on hopes that a Trump victory would lead to looser regulations for the financial sector, documents show that were released on Thursday.
Bridgewater, founded by Ray Dalio, ended September with larger positions in Goldman Sachs, Morgan Stanley (NYSE:), Wells Fargo (NYSE:), Bank of New York Mellon (NYSE:) and Citi Group (NYSE:). It also built a new position in Bank of America.
The fund’s largest position in dollars was Wells Fargo, a stake worth $79.6 million at the end of September.
The Index is up about 17% since the end of September and is up almost 12% since the November 5 vote.
It is not possible to say whether Bridgewater and the other funds maintained their positions after September 30, the cut-off date for 13-F filings. Although retrospective, the documents are one of the few ways to view the portfolios of often secretive market players such as hedge funds and sovereign wealth funds.
Other hedge funds betting on the banking sector included Dan Sundheim’s D1 Capital Partners (WA:), which had a new $174.9 million stake in Bank of America on September 30, a filing showed.
Coatue Management reduced its significant stakes in Meta Platforms (NASDAQ:) and Nvidia (NASDAQ:), but built new stakes in two investment firms. It bought 2.7 million shares of KKR, worth $355 million, and 195,969 shares of Blackstone (NYSE:), or about $30 million.
Both Blackstone and KKR, which manage private equity funds, could benefit from an uptick in dealmaking.
Some hedge funds also took positions in Tesla, benefiting from founder Elon Musk’s close relationship with Trump.
Shares in Tesla have risen more than 28% since November 5 as Trump was a candidate backed by Elon Musk. The Tesla founder will lead the government’s efficiency initiatives.
Third Point added a new equity position of 400,000 shares in the EV maker, while Viking Global bought 436,272 shares. Coatue increased his stake in Tesla by 36.4% to 2.2 million shares, a position worth $584.5 million at the end of September.
Daniel Loeb, founder of Third Point, said in a letter to investors last month that he believed the Republican candidate had a better chance of winning the election and that he was adjusting his portfolio to deal with a potential boom in business activity. use.
Meanwhile, macro hedge fund Discovery (NASDAQ:) Capital Management took a new position in the private prison space Geo Group Inc (NYSE:), with 387.1 million shares.
The company’s shares have skyrocketed more than 84% since the election as Trump’s promised crackdown on illegal immigration could boost demand for detention centers.
