High-profile hedge funds jump on the EV bandwagon, loading up on Rivian shares

Published Mon, Feb 21 20229:00 AM EST

A slew of big-name hedge funds added stakes in the burgeoning electric vehicle space at the end of 2021, and the interest in newly public Rivian Automotive was particularly high among high-profile investors from Dan Loeb to Philippe Laffont. Electric pickup maker Rivian attracted sizeable investments from a number of hedge funds in the fourth quarter, according to new quarterly regulatory filings. Laffont's Coatue Management scooped up nearly $3.7 billion worth of shares last quarter, while Daniel Sundheim's D1 Capital Partners invested $1.6 billion in the EV maker, making it its second-biggest holding. Andreas Halvorsen's Viking Global Investors bought more than $300 million worth of Rivian's stock in the fourth quarter. Those three investors are some of the so-called Tiger Cubs who trained under hedge fund pioneer Julian Robertson. Electric vehicle makers have become investor darlings on growing demand for cleaner cars. Many bet that EV stocks could benefit from new legislation and federal grants to build a national network of electric vehicle charging stations. Rivian, backed by Amazon, was one of the biggest IPOs of 2021 with its market cap briefly topping those of traditional automakers like Ford and General Motors . However, the stock has wiped out all of its post-debut pop, falling 37% in 2022. Many other electric-vehicle start-ups have also suffered steep losses during 2022's tech-led market sell-off, including Lordstown Motors , Nio , Canoo and Nikola. Since some of these new companies have yet to produce their vehicles in high volumes, investors tend to dump these riskier assets with earnings far out in the future during market turmoil. Early investors win big While Rivian's performance in the public markets has been disappointing, early investors like Third Point's Dan Loeb could be reaping profits. Loeb reportedly made $300 million at one point via a series of private investments over the past year, including in its convertible notes, the Financial Times reported. Loeb raved about the EV name in a recent investor letter, saying: "Rivian stands out with a compelling brand, an excellent first vehicle, and a unique partnership with Amazon that allows them to scale quickly." At the end of 2021, Loeb held $420 million worth of Rivian stock. Greenlight's David Einhorn revealed in a recent investor letter that he made a "material gain" from Rivian's IPO through a small investment in mid-2020. He added that he didn't have material exposure at the end of 2021. Other EV picks Michael Burry, one of the first investors to call and profit from the subprime mortgage crisis, is betting on an electric motorcycle company that's going public via a SPAC deal. In the fourth quarter, the founder of Scion Asset Management added a $10 million stake in AEA-Bridges Impact Corp. , a special purpose acquisition company that's merging with LiveWire, Harley-Davidson 's electric motorcycle division. Meanwhile, the more established Tesla remained a hedge fund favorite. D1 picked up $147.5 million worth of Tesla shares. It was also Coatue's second-biggest holding at the end of 2021, worth more than $1.5 billion.

A couple look at a display of electrified vehicles on offer from Toyota at the Washington Auto Show in Washington, January 25, 2022.

Kevin Lamarque | Reuters