Long/short equity technology-focused hedge fund ChipInvestor Group is in buying-mode, staying 80-90% long with its only shorts being hedges. President Manoj Nadkarni said all of its current positions for the ChipInvestor Partners fund are in the U.S. or Canada, but that these companies—which include those in the PC, communication and wireless sectors—sell their products globally. “What we see here in the U.S. only has so much bearing,” he explained.
One such firm is Integrated Device Technology (NASDAQ: IDTI). ChipInvestor started to buy up IDTI “too early” at the end of last year, admitted Nadkarni. The stock seemingly bottomed out in early-March at $4.12, and has come up to about $6. Nadkarni said he continues to buy it because most of its revenue is from overseas, it has a strong balance sheet and a history of solid cash generation during “normal” years.
The fund is up 30.2% year-to-date as of the end of May. While Nadkarni said he hopes to stay in the 80-90% net long range, if he sees signs of weakening in the sector, such as poor quarterly reports, he will take down this amount. The fund, which has fewer than $50 million under management, takes 15-20 positions on average. Nadkarni said he is currently trying to reach out to new investors to grow his fund, which launched in 2006.
This article was originally published in Alternative Investment News.
