Hedge fund manager Maverick Capital sent out its fourth-quarter 2009 investor letter earlier this month, detailing both Maverick’s 2009 performance and its predictions for 2010. According to the investor letter, throughout 2009 “fundamental stock-picking was a challenging endeavor as equity markets opened the year with the continuation of last year’s collapse” and as “fundamentals took a backseat to liquidity flooding out of and into the markets as well as to ballooning and collapsing risk premiums.” However, on a smaller-capital basis, “credit, small cap and private equity efforts each generated terrific returns” for Maverick. In industry-specific sectors, only consumer and healthcare generated disappointing returns, and “technology and media & telecom sectors were significant contributors” to performance. Shorting, on the other hand, provided a challenge in 2009 even though Maverick emerged with “slight gains in our short investments in Japan and the credit space.”
Overall, Maverick Capital’s founder Lee Ainslie concludes that “Maverick’s returns were strong in the US and in Japan last year, but disappointing in both European and emerging markets.” The firm’s flagship Maverick Fund was up 23.6% over 2009, which is slightly below the S&P 500’s 26.5%. More impressive were the Maverick Levered and the Maverick Long, which were up 5.17% and 56.9% over 2009, respectively.
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