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Chilton Investment Company’s Return, AUM, and Holdings

Nina Zdinjak

Chilton Investment Company is a hedge fund formed by Richard Lockwood Chilton back in 1992. Prior to starting his own firm, Richard Chilton built his investment career working as a managing director at Allen & Company, and as a vice president and portfolio manager at Alliance Capital Management. His beginnings were at Merrill Lynch where he was part of the Mergers and Acquisitions group. Currently, he is a director of Robin Hood Foundation, and he also is a member of the Board of the Metropolitan Museum of Art. Richard Chilton holds a B.S. in Finance and Economics from Alfred University.

The fund employs long/short and long-only investment strategies using a bottom-up approach, trying to grab upside in rising markets and to protect its capital in less favorable markets. Chilton Investment Company’s business philosophy is centered on long-term success, and asks for patience and confidence. Richard Chilton developed his Flagship Strategy from the start, back in 1992, and since its inception, the Chilton Flagship strategy has delivered big and steady returns, with controlled volatility. Let’s take a look at some of its recent return figures.

 

CHILTON INVESTMENT COMPANY

Chilton Flagship Strategy fund returned a fantastic 18.57% in 2013, 5.39% in 2014, 13.99% in 2015, after which it came one down year for the fund when it lost almost the same percentage it gain the year before, or more precisely in 2016 it lost 13.66%. It made a satisfactory comeback next year, delivering a return of 12.18%. 2018 also seems favorable for the fund as it has returned 9.44% through October. Chilton Flagship Strategy fund had an outstanding total return of 2103.80%, a compound annual return of 12.55%, while its worst drawdown was 28.30. According to the fund’s form ADV part 2A firm brochure, on December 31, 2017, it had around $2.47 billion in discretionary assets under management.

Insider Monkey’s flagship strategy identifies the best performing 100 hedge funds at the end of each quarter and invests in their consensus stock picks. This way it is always invested in the best ideas of the best performing hedge funds and is able to generate much higher returns than the market. Since its inception in May 2014, our flagship strategy generated a cumulative return of 96.9%, beating the S&P 500 ETF (SPY) by over 40 percentage points (see the details here).

On September 30, after the fund has made many portfolio changes, including adding 10 new positions and dumping 12 stakes, its portfolio was valued $3.04 billion. Among its largest holdings at the end of the third quarter, was Microsoft Corporation (NASDAQ:MSFT), which was the number one among the 30 most popular stocks among hedge funds in Q3 of 2018. The fund reported holding 1.30 million Microsoft’s shares, that were valued $149.21 million. More about similar positions and other portfolio moves the fund had during the third quarter you can read on the next page.

The most valuable position, which occupied 7.25% of Chilton Investment Company’s equity portfolio at the end of Q3 2018, was in Sherwin-Williams Co (NYSE:SHW). This is an American Fortune 500 company headquartered in Cleveland, which produces and sales a variety of paints, coatings and similar building material products. The fund disclosed owning 484,596 company’s shares that were valued $220.59 million. Smart money investors from Insider Monkey’s table have become more bullish on Sherwin-Williams in recent months and there were 38 hedge funds long the stock at the end of the third quarter, up from 35 in the previous quarter.  Since the beginning of the year, the company’s stock lost 4.93% and it is currently trading at $393.31. The second largest holding Chilton Investment Company had in the third quarter was in Home Depot Inc (NYSE:HD), and it counted 870,685 shares that were worth 180.36 million.

Among the companies that the fund added to its portfolio during the third quarter, the biggest positions were initiated in Kemper Corp (NYSE:KMPR) and Motorola Solutions Inc (NYSE:MSI). In Kemper, one of America’s biggest insurance providers, Chilton Investment Company established a position that was worth $18.80 million on the account of 233,724 shares. Kemper has seen an increase in interest from smart money investors in our database in the recent period as the number of hedge funds long the stock increased by five, hence at the end of the third quarter, there were 14 investors bullish on the stock. The fund has purchased 56,773 Motorola’s shares, and in that manner, it has established a position in the company that was valued $7.39 million on September 30. Over the past 12 months, Motorola’s stock price gained 26.73%, and it is now trading at $116.11.

The biggest positions the fund dropped in the third quarter of 2018 were those in The Goldman Sachs Group, Inc. (NYSE:GS), Southwest Airlines Co (NYSE:LUV), and in DowDuPont Inc (NYSE:DWDP). The fund said goodbye to 94,110 Goldman Sachs’ shares that were valued $20.76 million, and to 313,753 Southwest Airlines’ shares that were worth $15.96 million. The position in DowDuPont, which the fund also completely sold out, previously counted 360,043 shares, with a value of $23.73 million.

Disclosure: None

This article was originally published at Insider Monkey.