Lone Pine's Cypress Fund Said to Dip 8% in First Quarter

Apr 15 2016 | 11:18pm ET

Lone Pine Capital's flagship Cypress fund reportedly booked an 8% loss in the first quarter on poor performance from positions in Valeant Pharmaceuticals, Energy Transfer Equity and Williams Companies.

"Lone Pine had a poor first quarter, as two investment errors hurt our long performance,” said the firm, according to a Reuters report citing a letter dated April 14. “Sharp rebounds in previously underperforming stocks hampered our short performance," added Lone Pine in the letter.  

Former hedge fund darling Valeant has been responsible for torpedoing the results of several well-known hedge funds, including Bill Ackman’s Pershing Square and John Paulson’s Paulson & Co. The stock is down nearly 70% this year alone.

Meanwhile, Energy Transfer Equity, which plans to merge with Williams Cos. later this year, has been slammed both by significant drama around the merger and pressure on the energy industry in general. ETE is down 34% so this year while Williams is down 32%.

Lone Pine’s letter reportedly said the hedge fund manager did not correctly anticipate the consequences of the acquisition-driven growth strategies in place at both firms. 

Neither Energy Transfer Equity nor Williams Cos. was listed among Lone Pine’s top long positions in the letter, suggesting the fund exited them in the first quarter. Amazon, Facebook, JD.com and Microsoft remain core positions, Reuters reported, as well as Charter Communications, Dollar Tree Stores, and Shire PLC.

Founded in 1997 by former Tiger Management analyst Steven Mandel, Greenwich, CT-based Lone Pine manages approximately $23 billion in assets, according to securities filings. 


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