An IPO Pro Buys More Palantir, Rivian, and Kenvue. It Sold Li Auto.

Renaissance Capital LLC, a renowned firm specializing in initial public offering (IPO) research and money management, has made some significant moves in the third quarter. In a recent filing with the Securities and Exchange Commission, the firm disclosed its stock trades, which included buying more Palantir Technologies stock (ticker: PLTR) and increasing its stake in consumer-health firm Kenvue (KVUE). Additionally, Renaissance Capital exited its investment in Li Auto (LI) and bought more shares of Rivian Automotive (RIVN).

Matt Kennedy, a senior strategist at Renaissance Capital, explained that the firm manages two passive IPO-focused exchange-traded funds designed to track their rules-based IPO indices. Unlike actively run ETFs, Renaissance Capital’s trading activity is largely determined by the rules laid out in their index documents. The goal is to offer investors a basket of the largest and most liquid IPOs of the past three years, with a 10% weighting cap based on float-adjusted market capitalization.

Renaissance Capital’s decision to exit its investment in Li Auto was simply due to the three-year window closing on the Chinese electric-vehicle maker’s IPO. The firm had sold all 205,751 Li Auto American depositary receipts it held by the end of September. While Li Auto ADRs experienced a 36% drop in 2022, they soared 75% in the first three quarters of 2023, outperforming the S&P 500, which rose 12% during the same period.

Shares of Rivian, another electric vehicle (EV) maker, also saw a positive trend in the first nine months of 2023, rising by 32%. However, this increase wasn’t enough to overcome the significant 82% plunge in 2022. In the fourth quarter, Rivian shares have dropped by 21%. Despite this, Renaissance Capital bought an additional 135,418 Rivian shares in the third quarter, increasing its investment to a total of 335,574 shares.

Palantir, a data-analytics company, experienced a remarkable 150% surge in its stock price during the first three quarters of 2023, nearly erasing the 65% decline it faced in 2022. Renaissance Capital took advantage of this positive momentum and bought 221,221 more Palantir shares, bringing its total holdings to 948,588 shares. So far in the fourth quarter, Palantir’s stock has gained 8.5%.

Renaissance Capital’s new top holding is Kenvue, a consumer-health firm. The firm acquired an additional 800,316 Kenvue shares in the third quarter, ending the period with a total of 878,829 shares. Kenvue recently waived its 180-day lock-up restriction after going public, and it joined the prestigious S&P 500 in August. This demonstrates the company’s growth potential and market recognition.

Overall, Renaissance Capital’s strategic moves in the third quarter reflect its commitment to investing in innovative companies. By increasing its holdings in Palantir and Rivian, as well as acquiring more shares of Kenvue, the firm demonstrates its confidence in these companies’ future prospects. With a focus on IPOs and a rules-based approach, Renaissance Capital continues to provide investors with opportunities to participate in the growth of promising companies in various sectors.