Zillow Powers 2023 Gains for Will Vicars’ Caledonia Despite Shorts Getting Hammered In Q4 [In-Depth Exclusive]

Will Vicars’ Caledonia returned 37.5% net for 2023, including co-investments, significantly outperforming the S&P 500’s 26.3% gain and the MSCI World’s 23.7% return. Caledonia’s Combined Strategy returned 22.6% net in December and 12.3% for the fourth quarter.

The multi-billion dollar Australian hedge fund credited Zillow with playing a key role in its robust returns, noting that the stock has soared recently, rising 79.6%. Flutter Entertainment and Light & Wonder also outperformed the S&P 500 and MSCI World on a five-year basis, while Zillow is quickly closing the gap.

However, the Caledonia team thinks that outperformance is only starting. In their 2023 letter to investors a copy of which has been reviewed by Hedge Fund Alpha, Vicars and Mike Messara said they expect their core long positions to enjoy the largest earnings edge ever in 2024 compared to consensus expectations. In fact, they also expect their core longs to raise their guidance “repeatedly” in 2024.

Caledonia’s long book attributed 35.8% of its 2023 return, driven by