Daniel Benton’s Andor Opportunity Fund, the long-short equity fund managed by his Rye Brook, New York-based firm, Andor Capital Management, lost 5 percent in September. This slashes its gains for the year to between 4 percent and 5 percent.
Benton’s investors, however, are used to these kinds of sharp monthly moves. For example, in August the volatile technology and Internet-focused fund surged about 14 percent. And it gained 19.5 percent in June alone. Yet at that time, the fund was still negative for the year because it was down 21 percent through May and 12 percent through April.
Such wild swings are nothing new for Benton, a co-founder of the once high-flying but now defunct hedge fund Pequot Capital Management. Andor spun out of Pequot in 2001 and managed as much as $9.6 billion at its peak in 2003. But Benton shut it down in 2008 following big losses amid the global financial crisis, saying at the time that he wanted to spend more time with his family.
Benton, who began raising money again in 2011 for the current iteration of Andor, typically takes large, concentrated positions in a handful of tech and Internet-oriented stocks. For example, at the end of June, Andor had a roughly $1.8 billion U.S. stock portfolio. However, four stocks alone accounted for half of those assets.
Tesla Motors, the electric vehicle maker, Andor’s biggest position at the end of June with more than 16 percent of assets, fell by 10 percent in September. Apple, the technology giant, which accounted for more than 10 percent of assets, fell less than 2 percent.
On the other hand, Twitter, Andor’s second-largest holding with 11.1 percent of assets, rose 3.6 percent. Facebook, another social media holding, which accounted for more than 10 percent of assets, rose 5.6 percent.
The next four largest holdings — Google’s A shares, video streaming service Netflix, software company Workday and solar energy company SolarCity Corp. — accounted for another 25 percent of assets. In other words, Andor’s top eight holdings account for about three-quarters of its assets. In September, Google rose 1 percent, but Netflix fell about 5.5 percent, Workday fell 10 percent, and SolarCity sank 13 percent.
Andor also did not exactly get off to a good start this quarter. Its stocks were among the bigger losers in the market’s overall sell-off on Wednesday. Tesla dropped 1 percent, Apple fell 1.6 percent, Twitter slumped nearly 3 percent and Facebook slid more than 3.1 percent. Also, Google lost 1.5 percent, Netflix fell 2.7 percent, Workday dropped 2.4 percent and SolarCity shed 5.3 percent.
However, as Benton’s longtime followers know very well, a lot could change in the remaining 22 trading days this month.
