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For many asset managers and companies, 13F documents are an unwelcome intrusion. At the end of each quarter, those with at least $100mn in assets under management must disclose their equity holdings. For investors in the tech sector, however, these disclosures can be a treasure trove.
First of all, 13Fs show how investor positions in tech stocks have changed and how private holdings are valued. BlackRock’s investment in Nvidia has remained stable this year, for example. Fidelity reduced its investment in Uber by nearly half in the second quarter.
Disclosures are retrospective, filed 45 days after the end of the quarter. But the information still has value. Not all investments are reported in quarterly earnings, for example.
The tech sector’s habit of making large equity investments of their own means there is also information to glean about company plans.
Take Google’s parent company Alphabet, which reported investments in nearly 50 companies in its last 13F. Many are medtech or biotech companies, including Decibel Therapeutics and Fulcrum Therapeutics. Google dissolved healthcare unit Google Health in 2021. The term was mentioned only twice in the last quarterly earnings report. Yet the investments prove its ongoing financial interest in the sector.
For some tech companies, it has also become relatively common practice to invest in start-up clients. The hope is that accounts will grow as the start-up grows.
Software company Palantir has a “strategic commercial contract” with some of the companies it invests in. In August, it reported investments in flying taxi company Lilium and electric vehicle charging network Allego among others. The companies fit Palantir’s bold outlook. But they do not show much stock picking prowess. Lilium is down 62 per cent in the past year. Allego is down 51 per cent.
Some companies want to stop publishing such details. The Securities and Exchange Commission once suggested changing rules by raising the reporting threshold. But Lex approves of transparency. 13Fs are an important tool in the investor’s arsenal.
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