Billionaires: George Soros dumps Big Tech in favour of Peloton and Rivian

In our fortnightly roundup, Aston Martin chairman Lawrence Stroll aims to pay down the car maker’s debt and Carl Icahn is confident that his revamped $4.2bn offer for Southwest Gas will succeed

George Soros’s investment company has cut its stake in the biggest exchange-traded fund that tracks the technology-heavy Nasdaq 100 index. Bloomberg

George Soros

Soros Fund Management reduced its holdings in Big Tech stocks before January’s market tumult, while disclosing a $2 billion stake in electric pickup maker Rivian Automotive.

George Soros’s investment company slashed its stake in the Invesco QQQ Trust Series 1, the biggest exchange-traded fund tracking the technology-heavy Nasdaq 100.

It held only $9.4 million at the end of December, down from $356.2m at the end of the third quarter, according to a regulatory filing on February 11. It also trimmed positions in Amazon and Google owner Alphabet.

The New York-based company disclosed it held more than $2bn in shares of Rivian, which went public in November, and revealed a new $13.3m holding in exercise bike maker Peloton Interactive.

The value of its US equity portfolio jumped by $1.2bn to $6.5bn, thanks in part to its stake in medical records systems provider Cerner. Those shares jumped more than 31 per cent in the fourth quarter after Oracle agreed to acquire Cerner in December.

The billionaire philanthropist’s investment company manages more than $28bn, including public and private equity.

Mr Soros, 91, has used his fortune to fund groups promoting justice, democracy, human rights and progressive politics through his Open Society Foundations.

He has poured billions into his philanthropic efforts and most of his company’s assets now belong to the foundations rather than to the Soros family. His personal wealth is estimated at $7.5bn, according to the Bloomberg Billionaires Index.

Money managers overseeing more than $100m in US equities have to file a 13F form within 45 days of the end of each quarter to list their holdings in stocks that trade on US exchanges. It is one of the few places to gain insight into how hedge funds and some large family offices invest.

Lawrence Stroll

Aston Martin Lagonda Global Holdings chairman Lawrence Stroll gives himself high marks for the turnaround he has overseen so far.

His next orders of business: figure out how to speed up the process of hand-building what he calls the most complex car ever and paying down debt.

Speaking at the recent unveiling of the AMR22, Aston Martin’s Formula One car for the coming season, the billionaire Canadian, who came to the British company’s rescue in early 2020, talked up the car maker’s progress in paring inventory and improving its cash position, which he said should help bring down interest costs in the coming years.

“I will be renegotiating the bonds at a more favourable rate, probably, and taking some cash to pay down” part of the debt, Mr Stroll said. “This company will be cash-flow positive in 2023.”

In addition to injecting much-needed cash, Mr Stroll forged closer ties with Germany’s Mercedes-Benz to put Aston Martin on steadier footing in the midst of the pandemic. In mid-2020, he hired Tobias Moers, who previously led Mercedes’s AMG performance-car business, as chief executive.

At the end of the third quarter, Aston Martin had net debt of £809m ($1.1bn) and expected interest costs of £165m in 2021, it said in November.

A year ago, the company raised $98.5m in senior secured notes due in 2025 with a 10.5 per cent coupon. These notes come with a four-year call protection, meaning refinancing the senior debt will come with a penalty.

Aston Martin may buy back some of the more expensive mezzanine bonds once the company generates cash, Mr Stroll said, ruling out the need for any further capital raising.

“We don’t need any more money at all,” he said. “Let me be crystal-clear, black-and-white: we do not need money.”

While Aston Martin battled issues with complexity that delayed the initial assembly of its £2.4m Valkyrie supercars, Mr Stroll said the project is now on track after technicians from his Formula One team were parachuted in to help.

“Everything has been resolved, but they are taking a little longer to build than initially established,” he said of the sold-out cars. Not a single customer had asked for their deposit back, he said.

Last month, Aston Martin issued a warning that fourth-quarter earnings would take a hit after the company delivered fewer of the supercars than anticipated.

“The only thing I have disappointed on since I got here is the number of Valkyries that we said we were going to deliver last year, versus what we did,” Mr Stroll said.

Carl Icahn

Billionaire investor Carl Icahn is confident that his revamped tender offer for Southwest Gas Holdings will succeed.

Changes made to his $4.2bn deal to acquire Southwest Gas shares should help sidestep any potential regulatory obstacles to the transaction, Mr Icahn said. His comments echo those made three weeks ago, when the activist investor outlined his retooled plan in a letter to shareholders.

“We are making that tender offer and we believe it will be successful,” Mr Icahn said in an interview on February 16. “We think we have met every condition you need for that tender offer.”

In October, Mr Icahn offered to acquire the shares in Southwest Gas that he does not already own for $75 apiece. He also sought to nominate 10 directors to replace the board, arguing that significant change was needed to improve the company’s performance.

He has been critical of Southwest Gas’s decision to buy Questar Pipelines and, in particular, the equity and equity-linked securities it plans to issue to help finance the deal.

“You have got a board that is basically a do-nothing kind of board,” Mr Icahn said.

Last month, Mr Icahn said he planned to agree to vote only 24.9 per cent of the shares tendered in an updated offer, which he said would eliminate the risk that regulators in Nevada, Arizona and California would block him from taking control of the Las Vegas-based utility.

The board of Southwest Gas has unanimously rejected Mr Icahn’s offer, arguing that it undervalues the company, is not in the best interest of its shareholders and still raises regulatory issues.

Vladimir Potanin

Russia’s second-richest man believes tokens and a digital rouble initiative will give the country’s crypto-sceptical central bank a way to promote new technology without the risks associated with currencies such as Bitcoin.

Billionaire Vladimir Potanin is an investor in Atomyze, which uses blockchain to turn real assets ranging from metal to homes into tokens that can be easily exchanged. This month, the company’s Russian unit received a licence allowing the platform to issue digital assets and offer trading.

“Unlike some cryptocurrencies, platforms like Atomyze offer consumers high-quality and secure digital goods and may squeeze unreliable products out from the market,” Mr Potanin said.

Mr Potanin’s position echoes the Bank of Russia, which supports the development of digital financial assets while advocating a complete ban on mining and trading cryptocurrencies that it says pose a threat to the country’s financial system.

The government backs regulating and taxing digital currencies while President Vladimir Putin has called on authorities to find a compromise.

The development of digital assets, tokenisation and the central bank’s digital rouble programme may make the debate over cryptocurrencies irrelevant, according to Mr Potanin, who has a net worth of $31.3bn, according to the Bloomberg Billionaires Index.

Regulators fear cryptocurrencies and stablecoins because they are uncontrolled currency emissions, while a digital asset or token is similar to a contract giving customers the opportunity to buy a product or service in a digital form using blockchain, an online ledger that tracks and verifies every transaction or change, he said

“Metal coins were replaced by paper money, and then transactions became cashless,” Mr Potanin said. “Digital financial assets are just the next stage.”

Mr Potanin’s Interros holding helped to set up Atomyze two years ago as it sought a way to make trading metals more efficient.

He is the biggest shareholder in MMC Norilsk Nickel, the world’s largest producer of refined nickel and palladium, which has been offering metals-linked tokens to industrial clients and via exchange-traded commodities on several European exchanges since 2020.