How Qube Became One of the Biggest Tesla Bulls in the Hedge Fund World
Qube Research & Technologies is a global quantitative investment firm that traces its roots to Credit Suisse’s Quantitative and Systematic Asset Management unit. The firm, which was spun off from the bank in 2018, has been one of the most successful and aggressive buyers of Tesla shares in the past year.
According to the latest 13F filings, Qube built a $1.4 billion position in Tesla by the end of 2023, making it one of the largest hedge fund holders of the electric car maker. Qube increased its Tesla stake by 187.5% in the fourth quarter of 2023, adding 5 million shares to its portfolio. This means that Qube paid an average price of around $280 per share, well below the current market price of over $900.
Qube’s bet on Tesla has paid off handsomely, as the stock has soared more than 200% in the past 12 months, driven by strong demand, record deliveries, profitability and inclusion in the S&P 500 index. Tesla’s market capitalization has surpassed $800 billion, making it the most valuable car company in the world and one of the top five companies by market value.
Qube’s strategy is based on using computer models and data analysis to trade stocks across various sectors and regions. The firm employs about 600 people, mostly quants and engineers, and has offices in London, Paris, Hong Kong and Mumbai. Qube manages about $12 billion in assets, of which $4 billion are invested in its flagship multi-strategy fund.
Qube is not only bullish on Tesla, but also on other innovative and disruptive companies in the technology, biotechnology and renewable energy sectors. Some of its other top holdings include Amazon, Apple, Netflix, Moderna and Enphase Energy. Qube also has a significant short position against HSBC, which it disclosed in November 2023 after the bank reported a decline in third-quarter profit.
Qube’s performance has been impressive, as it has delivered an annualized return of 18% since its inception in 2016. In 2023, Qube’s multi-strategy fund gained 32%, outperforming the average hedge fund return of 11.6%, according to Hedge Fund Research. Qube’s success has attracted inflows from institutional investors, such as pension funds, endowments and sovereign wealth funds.
However, Qube is not resting on its laurels. In February 2023, Qube announced that it planned to hand over some of its capital to be managed by external parties, such as other hedge funds or asset managers. Qube’s CEO Pierre-Yves Morlat said that this move was aimed at diversifying its sources of returns and reducing its reliance on its own models. Qube also said that it was looking for new talent and opportunities to expand its business.
Qube’s story is a remarkable example of how a spin-off from a bank can become one of the leading hedge funds in the world. Qube’s bold and visionary investment approach has proven to be highly rewarding, especially in its conviction on Tesla. Qube’s future looks bright, as it continues to seek new ways to generate alpha and grow its assets.
