Keith Meister’s Corvex Management is off to its strongest start in years.
The activist hedge fund headed by the former chief executive officer of Icahn Enterprises is already up more than 20 percent through April, according to a person familiar with its results.
You can’t blame Corvex investors if they temper their enthusiasm, however. Of the previous four years, the firm’s main fund lost money in one year and posted low- to mid-single-digit gains in the other three. That said, last year’s low-single-digit gain easily outperformed the stock indexes, which finished in the red.
The surge this year followed a major portfolio shake-up in the first quarter. Nine of Corvex’s 14 biggest U.S. long common stock positions were established during the period, according to its most recent filing with regulators detailing its U.S. stock positions. Many of the new positions are in the most popular software, media, and internet stocks among hedge funds.
The overhaul seems to have paid off. Several of the new positions have heavily driven Corvex’s gains so far this year.
One is Adobe Systems. The software giant became Corvex’s fourth-biggest long at the end of the first quarter after the hedge fund established a new position of nearly 270,000 shares in the company. Its stock surged nearly 28 percent in the first four months of the year.
E-commerce giant Amazon, which instantly became Corvex’s sixth-biggest long in the first quarter, rose a little more than 25 percent for the four-month period.
Disney, its seventh-biggest long after Corvex established a position in the first quarter, jumped nearly 28 percent for the year through April.
Guidewire Software, which provides software to property and casualty insurance companies, surged nearly 33 percent through April.
Corvex’s biggest position is hospitality giant MGM Resorts International, which it established in the second quarter of 2018. It accounts for about one-third of Corvex’s total U.S. equity long portfolio, excluding the value of stock options positions.
Meister sits on the company’s board of directors and is also part of a small committee named earlier this year to evaluate MGM’s real estate portfolio. The stock returned a little less than 10 percent in the first four months of the year.
Corvex’s second-biggest U.S. long disclosed in the 13F is Diamondback Energy, accounting for about 22 percent of its U.S. stock portfolio excluding options. The stock gained nearly 15 percent for the first four months.
Two of Corvex’s biggest investments are not contained in the 13F filing, however. It has a sizable stake
