Lone Pine hit summer on a high and ran straight into a wall. A sharp July selloff in AI and tech, layered on top of tensions involving Iran and a spike in oil prices, set off a wider market downdraft that stung many hedge funds. Against that backdrop, wrong-way longs and shorts turned a 44% year-to-date climb through June into something close to flat by quarter end. Cypress fell nearly 25% in July and kept losing in the following months, leaving it up just 0.6% for the year through September and down roughly 30% for the quarter, according to people familiar.
Filings as of June 30 show several positions that hurt in the third quarter. Larger stakes in Nebius Group NV, ASML Holding NV and Home Depot Inc. slid significantly, while medium-sized holdings such as MasTec Inc., AppLovin Corp. and Corning Inc. fared even worse. Short bets compounded the damage.
Giving back a year's gains in weeks is the risk concentration carries. Market Briefs covers hedge fund performance free every morning.
After logging double-digit returns in each of the past three years, Stephen Mandel's firm has suddenly reversed course. Rather than piling into headline AI winners like many peers, Lone Pine has maintained relatively lighter exposure to classic AI trades and has emphasized sectors such as materials, healthcare, financials, consumer staples and industrials. Leadership is also shifting: long-tenured CIO Kelly Granat is leaving for Gavin Baker's Atreides Management, which makes larger bets on public and private tech. The remaining co-CIOs are David Craver and Rahul Anne.
The long-only portfolio - which accounts for about three quarters of the firm's $19 billion - also lost altitude, sliding from nearly 39% up through June to a 6.7% gain by September, one person said. A firm representative declined to comment. The reported figures for both funds pertain solely to publicly traded equity holdings, omit private investments, and the performance was previously reported by Institutional Investor.
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