Coatue hosts Apple CFO despite dumping shares

By Lawrence Delevingne

Thu Feb 21, 2013

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Philippe Laffont interviewed Peter Oppenheimer at firm's annual investor meeting; iPad minis for attendees.

  Peter Oppenheimer (Photo: Apple)
Philippe Laffont's Coatue Management may have dumped Apple shares in the fourth quarter, but the firm gave the tech company a prime time slot at its annual investor meeting.

The event, held yesterday at Lincoln Center in Manhattan with nearly 300 attendees, featured a so-called fireside chat between Laffont and Peter Oppenheimer, Apple's senior vice president and chief financial officer. According to people in attendance, Oppenheimer discussed his history at Apple and the company's plans.

Coatue, a longtime Apple investor, distributed iPad minis to attendees. The devices cost between $329 and $659 depending on the version. The apparent love for Apple is in contrast to the story told by Coatue's publicly disclosed holdings: the firm sold 54% of its Apple shares during the fourth quarter and held $342 million of stock as of December 31, according to regulatory filings. The stock was still the firm's fifth largest position at yearend after Equinix, Virgin Media, Time Warner and Liberty Global.

Apple shares fell sharply during the fourth quarter, but Coatue has performed strongly overall. The flagship fund is up 3.9% through January 31 (offshore) and rose 17.6% net in 2012. Through January, the firm had produced a net annualized return of 14.1% since its 1999 inception by Tiger Management alum Laffont.

Investors are happy: "We are extremely pleased with Coatue. We invested in February last year they've just done great," said Austin Cooley, director of liquid strategies at the Fire and Police Pension Association of Colorado, who didn't attend the event. "We really like their detailed, independent work on tech stocks like Apple."

Coatue managed $6.3 billion on January 1 in hedge fund assets, up from $5.9 billion on July 1, according to the Absolute Return Billion Dollar Club.

An external spokesman for Coatue, Jonathan Gasthalter of Sard Verbinnen & Co., declined to comment. Apple did not respond to a request.

Long a hedge fund favorite, many managers have dumped Apple stock recently. The largest 50 hedge funds pulled more money in the company than any other stock in the fourth quarter, according to FactSet Research Systems, which tracks public investment filings. "The funds reduced their holding from 1.9% of shares outstanding to 1.3%, and Apple represented the largest individual equity sale in six of the fifty hedge funds. While Apple is still the most-represented, top equity holding of the 50 largest hedge funds, the number of funds which list Apple as the top equity holding has declined from 12 to 6 in just one quarter," a February 21 report said.

David Einhorn of Greenlight Capital has even sued Apple and today sent out a press release urging fellow shareholders to oppose the company's attempt to eliminate preferred stock from its charter, believing the company is holding too much cash. "We believe Apple must examine all of its options to unlock the growing value of its balance sheet for all shareholders," Einhorn said in a statement. "Over the past several months, we have had an ongoing dialogue with Apple regarding one option to do so, namely the creation of a new security, a perpetual preferred stock that would be distributed at no cost to Apple's existing shareholders, and would provide an attractive, sustainable dividend while preserving Apple's financial resources to pursue its business strategy."

See also: Coatue preps private equity fund

ISSN: 2151-1845 / CDC10004H

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