Hedge Fund Caledonia Grapples With 26% Slide in Huge Zillow Bet

Bloomberg05-23

(Bloomberg) -- One of Australia’s largest and most secretive hedge funds is sticking with its highly concentrated bet on Zillow Group Inc., predicting a sharp rally after the shares lost more than a ...

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overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nHedge Fund Caledonia Grapples With 26% Slide in Huge Zillow Bet\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-05-23 01:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/hedge-fund-caledonia-grapples-26-170000888.html><strong>Bloomberg</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>(Bloomberg) -- One of Australia’s largest and most secretive hedge funds is sticking with its highly concentrated bet on Zillow Group Inc., predicting a sharp rally after the shares lost more than a ...</p>\n\n<a href=\"https://finance.yahoo.com/news/hedge-fund-caledonia-grapples-26-170000888.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4588","symbol_name":"碎股","start_time":0,"source_url":"https://finance.yahoo.com/news/hedge-fund-caledonia-grapples-26-170000888.html","article_id":"2437211150","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/K.SZMzqmxGRQQryMhNilVQ--~B/aD02NzU7dz0xMjAwO2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/bloomberg_markets_842/2770a1fb9a0f605788b936d37946f7fa"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2437211150","pubTimestamp":1716397200,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":" -- One of Australia’s largest and most secretive hedge funds is sticking with its highly concentrated bet on Zillow Group Inc., predicting a sharp rally after the shares lost more than a quarter of their value this year.These Flight Routes Suffer the World’s Worst Turbulence. Citi Trader Got 711 Warning Messages Before Sparking Flash Crash. One Dead After Singapore Air Flight Hit By Severe Turbulence. Sydney-based Caledonia is the biggest shareholder in Zillow, the real estate firm that’s slumped 26% this year and trades at about one fifth of its 2021 peak. That roughly $2.2 billion stake ranks among the world’s most concentrated US equity positions held by a hedge fund, according to data compiled by Bloomberg.The origins of the Zillow position can be traced back in part to the firm’s desire to own market leaders in real estate. Messara said in a 2014 interview with Bloomberg T","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4588":"碎股","ZG":"Zillow Class A","BK4548":"巴美列捷福持仓","BK4551":"寇图资本持仓","BK4585":"ETF&股票定投概念","BK4079":"房地产服务","Z":"Zillow"},"translate_title":"对冲基金喀里多尼亚在巨额Zillow赌注中艰难应对26%的下滑","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"Z":1,"ZG":0.9},"content_text":"(Bloomberg) -- One of Australia’s largest and most secretive hedge funds is sticking with its highly concentrated bet on Zillow Group Inc., predicting a sharp rally after the shares lost more than a quarter of their value this year.\nMost Read from Bloomberg\n\nThese Flight Routes Suffer the World’s Worst Turbulence\nCiti Trader Got 711 Warning Messages Before Sparking Flash Crash\nOne Dead After Singapore Air Flight Hit By Severe Turbulence\n‘It Felt Like We Had Crashed’: Singapore Air Passenger Describes Turbulence Terror\n\nSydney-based Caledonia is the biggest shareholder in Zillow, the real estate firm that’s slumped 26% this year and trades at about one fifth of its 2021 peak. That roughly $2.2 billion stake ranks among the world’s most concentrated US equity positions held by a hedge fund, according to data compiled by Bloomberg.\nThe slide is testing the nerves of money managers at Caledonia, which first bought into the stock more than a decade ago. They say it’ll triple by the end of next year, according to a March investor letter seen by Bloomberg. That’s around three times higher than the average forecast of Wall Street analysts.\n“We have stuck with these positions and have not been bluffed out at the bottom, and we are going to strive mightily to not sell them too early,” co-chief investment officers William Vicars and Michael Messara wrote in the letter. “Volatility comes with the territory for us, and we are good with that.”\nCaledonia didn’t reply to requests for comment. A spokesperson for Zillow declined to comment. \nHigh conviction, out-of-favor bets, like Zillow, are common place at Caledonia, which keeps a low public profile. The privately held fund manager launched in 1992 from the wealth of Australia’s Darling family — a fortune built on grain and mining. In January, it managed about $11 billion and the fund has served Australia’s business elite, including the Packer and Fairfax families, former giants of the media industry. \nWhile dealing with underperforming stock bets is part and parcel of life for hedge fund managers, the concentration of those wagers puts Caledonia in a relatively rare position. \nThe Zillow stake makes up around two-thirds of Caledonia’s disclosed US equity investments, a level of concentration that ranks as the fifth-largest in a Bloomberg analysis of hedge fund positions worth at least $1 billion relative to a firm’s US stock portfolio. For Caledonia, the holding also makes up about a fifth of the assets the firm reported in January.\nExecutive Meetings \nCaledonia investors will also get a chance to quiz Zillow senior executives themselves later this year. A client event will be hosted in December with Jeremy Hofmann, the real estate group’s chief financial officer, and Brad Berning, head of investor relations, according to the investor letter.\nThe origins of the Zillow position can be traced back in part to the firm’s desire to own market leaders in real estate. Messara said in a 2014 interview with Bloomberg TV shortly after building its stake in the company that Zillow was set for substantial profit growth from increasing advertising generated revenue in the US, similar to Rightmove Plc in the UK and REA Group Ltd. in Australia. \nNow, Zillow says it’s expecting stalling growth in the US housing market and projects lower sales in its core business. That disappointing outlook earlier this month helped drag on the shares, which now sit at about $41.80. That’s about 79% below the 2021 peak when the company’s market value touched $48 billion.\nCaledonia reportedly fell more than 50% in the year through June 2022, only to partly recover in the following 12 months, echoing Zillow’s sharp decline and partial rebound. Exiting the stock would likely prove difficult, given prices can quickly move against large sellers. \n‘Extremely Well Positioned’\nThe fund’s sway over the stock may be under-appreciated given the hedge fund’s clients invest separately alongside the fund. One, billionaire James Packer, purchased 9.4% of Zillow in 2013, only to retreat in the following years, while Vicars and Messara noted recent buying. “We have seen some existing clients add to Zillow over the past year, and we are thrilled by this uptake,” the pair said in the March letter.\nThe hedge fund’s recent letter signaled its commitment to the investment is intact. The US housing market is a “coiled spring” that will eventually benefit Zillow as home transactions increased, Vicars and Messara wrote. \n“Zillow is extremely well positioned for the eventual rebound,” they said. “We think Zillow can achieve very significant earnings growth and exceptional share price performance.”\n--With assistance from Rick Zhao and Patrick Clark.\nMost Read from Bloomberg Businessweek\n\nA Hidden Variable in the Presidential Race: Fears of ‘Trump Forever’\nGoogle’s Moonshot Factory Falls Back Down to Earth\nHow the $17 Desk Salad Won\nMillennium Covets Citadel-Size Commodities Gains, Just Not the Risk\nWhat Neuralink’s First Patient Is Thinking\n\n©2024 Bloomberg L.P.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.24.2","shortVersion":"4.24.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2437211150"}