Hedge Fund Sylebra's Bearish Bets Pay Off Amid Tech Rout

(Bloomberg) -- A technology hedge fund led by a former Coatue Management LLC partner had its bearish bets vindicated last month amid an industry rout that toppled shares of firms from Alibaba Group Holding Ltd. to Amazon.com Inc.

Sylebra Capital Management’s $1.2 billion hedge fund gained 5 percent in December, bringing returns for the year to 11 percent after fees, according to a person familiar with the matter who declined to be identified because the details aren’t public.

The NYSE FANG+ Index, which tracks companies including Amazon.com, Facebook Inc., Twitter Inc., Netflix Inc. and Apple Inc., tumbled 10 percent in December as worries about rising interest rates and a global economic slowdown compounded concerns about tech-stock valuations. The sell-off contributed to a 2.9 percent decline in a Eurekahedge index that tracks equity hedge funds globally.

Like many tech-focused funds, Sylebra gave back some gains in the second half that were made in the earlier part of the year as investor sentiment shifted following a six-year bull run. The fund took on slightly more bearish bets than bullish wagers in the fourth quarter to help insulate itself from the market selloffs, the person said.

Sylebra’s full-year return compared to the estimated average 12 percent loss for Asia-focused stock hedge funds and 6.5 percent for such peers globally, according to Eurekahedge.

Sylebra’s Hong Kong-based Chief Investment Officer Dan Gibson honed his skills as an analyst and partner at New York-based Coatue, whose founder Philippe Laffont has dabbled in technology investments and used to work for Julian Robertson’s Tiger Management LLC.

To contact the reporter on this story: Bei Hu in Hong Kong at bhu5@bloomberg.net

To contact the editors responsible for this story: Katrina Nicholas at knicholas2@bloomberg.net, Peter Vercoe

©2019 Bloomberg L.P.