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

A firm that specializes in initial-public-offering research and money management made some major moves in the third quarter.

Renaissance Capital LLC bought more
Palantir
Technologies stock (ticker: PLTR) in the third quarter. It also exited an investment in
Li Auto
(LI), bought more
Rivian Automotive
stock (RIVN), and dramatically increased a stake in consumer-health firm
Kenvue
(KVUE) during the period. Renaissance Capital disclosed the stock trades, among others, in a form it filed with the Securities and Exchange Commission.

Matt Kennedy, a senior strategist at Renaissance Capital, said in an email that the firm manages two passive IPO-focused exchange-traded funds that “are designed to track our rules-based IPO indices.” Kennedy added, “So unlike actively run ETFs (e.g.
Ark Innovation ETF
(ARKK)), our trading activity at each quarterly rebalance is largely determined by the rules laid out in our index documents. The basic idea is to offer investors a basket of the largest and most liquid IPOs of the past three years, on a float-adjusted market cap basis, with a 10% weighting cap.”

Renaissance Capital exited its Li Auto investment in the third quarter simply because the three-year window closed on the Chinese electric-vehicle maker’s July 2020 IPO. It had 205,751 Li Auto American depositary receipts at the end of June and sold them all by the end of September.

Li Auto ADRs soared 75% in the first three quarters of 2023, wiping out a 36% drop in 2022. For comparison, the
S&P 500
rose 12% in the first three quarters of 2023, after a 19% drop in 2022. So far in the fourth quarter, the ADRs have slipped 3.8% while the index has been flat.

Shares of Rivian, another EV maker, also rose in the first nine months of 2023, 32%, but it wasn’t enough to overcome an 82% plunge in 2022. So far in the fourth quarter, shares have dropped 21%.

Renaissance Capital bought 135,418 more Rivian shares in the third quarter to lift its investment to 335,574 shares. It also bought 221,221 more Palantir shares to end the quarter with 948,588 shares.

Shares of Palantir, a data-analytics company, rocketed 150% in the first three quarters of 2023, nearly wiping out a 65% plunge in 2022. The stock has gained 8.5% so far in the fourth quarter.

Renaissance Capital has a new top holding, Kenvue, after buying 800,316 more shares to end the third quarter with 878,829.

Renaissance Capital’s Kennedy noted that Kenvue had waived its 180-day lock-up restriction after going public—former parent
Johnson & Johnson
(JNJ) spun off the shares to investors in May. Kenvue joined the S&P 500 in August.

Inside Scoop is a regular Barron’s feature covering stock transactions by corporate executives and board members—so-called insiders—as well as large shareholders, politicians, and other prominent figures. Due to their insider status, these investors are required to disclose stock trades with the Securities and Exchange Commission or other regulatory groups.

Write to Ed Lin at [email protected] and follow @BarronsEdLin.



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