Dan Sundheim’s D1 Capital Partners is the only hedge fund firm that held a private investment in Robinhood Markets before it went public last week, according to a regulatory filing made public Wednesday detailing the trading app’s investors.
D1 Master Holdco I owned roughly 17.5 million shares before the initial public offering, or 2.4 percent of the total, according to the filing. The firm’s stake included 281,954 shares of Class A common stock that would be issued if D1 exercises warrants.
The hedge fund firm’s investment in Robinhood is somewhat ironic, as it was among a number of hedge funds that were victimized earlier this year by the retail assault on popularly shorted stocks. In many cases, Robinhood was their trading platform of choice.
D1’s main hedge fund fell 20 percent in January alone.
However, it has sharply reversed course since then.
D1 was up 5.6 percent in July and 9.7 percent for the year-to-date, according to a person familiar with the firm’s performance. This is a swing of nearly 30 percentage points in just six months.
Robinhood priced its IPO at $38 per share in its much-anticipated public offering, hitting the low end of its proposed range.
The stock began trading on July 29.
The shares initially declined before hitting a high of $85. They closed at $50.97 on Thursday, falling nearly 28 percent after the filing, which details shareholder plans to sell.
D1 was not included in Robinhood’s initial going public filings because it was not a 5 percent holder.
However, in August 2020, Robinhood announced that it had raised $200 million in a Series G funding at an $11.2 billion valuation from D1 Capital Partners.
On September 22, 2020, Robinhood said it raised an additional $460 million in subsequent closings to its Series G round from new and existing investors including D1.
The Robinhood investments were not exactly rare private deals for D1.
D1’s class C hedge fund shares allocate 35 percent of their total capital to private investments.
This year it has enjoyed several other IPOs of earlier private investments.
Three weeks ago, for example, Rapid Micro Biosystems, which provides an automated microbial testing device and platform, went public at $20 per share in an upsized offering at the top of its proposed range.
The stock closed Thursday at $24.80, up 24 percent from the IPO.
D1 owned 7.73 percent of the Class A shares before the offering and figured to own 6.12 percent after the stock began trading, according to an earlier regulatory filing.
Back in March, D1 was one of a number of hedge funds to participate in the $125 million crossover financing of Absci, a synthetic biology company.
In July the company priced its IPO at $16 per share. The stock closed Thursday at $26.04.
So far this year, D1 has already made more than 40 new private investments, according to Crunchbase.
Software, e-commerce, and health care have been its most popular industries to invest in over the years.
