By: Manisha Sethi May. 25, 2018

Light Street Capital Management, LLC’s SEC 13F filings on February 14, 2018, reported a portfolio value of $924.95 million for the last quarter of 2017, with the top 10 holdings comprising 77.11% of the portfolio. Light Street Capital Management’s largest holding, comprising 4.88% of its portfolio, is Wayfair, Inc. (W) with 9,75,000 shares and a market value of $78.26 million. The firm’s portfolio largely consists of firms from the technology sector. Light Street Capital Management, LLC was founded by Glen Thomas Kacher in May 2010 and is based in Palo Alto, California, where it operates as an employee-owned hedge fund sponsor. The firm primarily provides its services to pooled investment vehicles and invests in public equity markets across the globe as well as in companies operating in various sectors with a focus on technology, eCommerce, retail, Internet media, traditional media, alternative energy, and telecom. It also conducts in-house and external research when making its investments.

According to Raltin, around 56% or 50 of Light Street Capital Management’s new purchases outperformed the S&P 500, out of which 39 new stocks successfully beat the S&P 500 by more than 10%. Only 33% or 29 new buys out of 89 (between Q1 2014 and Q4 2017) underperformed the S&P 500 by the same percentage. Raltin’s detailed methodology for calculating the S&P 500 outperformance is given here. The table below shows the total number of new stock purchases and the various S&P outperformance categories.

S&P outperformance categoryNumber of new stock purchasesTotal new purchases (% )
>20%2326
10-20%1618
0-10%1112
-10-0%1011
-20 to -10%89
<-20%2124
Total stocks89

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The institutional investor bought 7 new stocks in Q4 2017 from the IT, communications, and consumer discretionary sectors. Microsoft Corp. (MSFT) and NetEase, Inc. (NTES) comprise  3.70% and 3.17% of its portfolio, respectively. The table below lists all its new buys in this quarter along with their number of shares and holding value.

StocksNumber of sharesHolding value ($1,000)
Microsoft Corp. (MSFT)400,00034,216
NetEase, Inc. (NTES)85,00029,331
Stitch Fix Inc Class A (SFIX)1,100,00028,413
TAL International Group, Inc. (TAL)850,00025,254
Okta, Inc. (OKTA)700,00017,927
MercadoLibre, Inc. (MELI)37,28911,733
Coupa Software Incorporated (COUP)125,0003,903

The following table shows the portfolio value of the fund for 5 quarters starting from Q1 2017 to Q1 2016, along with the top holdings in each quarter that outperformed the S&P 500. Mulesoft, Inc. (MULE), Square, Inc. (SQ), Tesla Motors, Inc. (TSLA), Wayfair, Inc. (W), MercadoLibre, Inc. (MELI), and many more have beaten the index by huge margins.

PeriodTotal portfolio value ($Mn)Top holdings (ticker, % IRR difference from S&P 500)
Q1 20171,245.44Mulesoft, Inc. (MULE, 69.4), Alibaba Group Holding Limited (BABA, 58.8), Stamps.com, Inc. (STMP, 58.46)
Q4 2016731.85GDS Holdings Limited ADS (GDS, 143.23), Square, Inc. (SQ, 135.58), Microsoft Corp. (MSFT, 18.34)
Q3 2016993.55Tesla Motors, Inc. (TSLA, 51.22), Alibaba Group Holding Limited (BABA, 47.28), YY Inc. (YY, 46.9)
Q2 2016547.59Wayfair, Inc. (W, 81.7), Take-Two Interactive Software, Inc. (TTWO, 78.08), LogMein, Inc. (LOGM, 49.32)
Q1 2016587.2MercadoLibre, Inc. (MELI, 64.74), ServiceNow, Inc. (NOW, 28.27), Time Warner, Inc. (TWX, 19.98)