Eminence's Sandler Says He Likes Facebook Despite Data Concerns

(Bloomberg) -- Ricky Sandler, founder of $7 billion hedge fund Eminence Capital, says he likes Facebook Inc. because its data analytics is “vastly under-monetized.”

“You can get superior growth down the market,” he said of the social-media platform that has come under fire recently for data-privacy concerns. Sandler, chief executive officer of Eminence, made the comments in an interview with Bloomberg Television on Tuesday at the Milken Institute Global Conference in Beverly Hills, California.

Facebook CEO Mark Zuckerberg said earlier in the day that the company is rolling out a new dating feature. The tool will help connect people who aren't Facebook friends, Zuckerberg said at the company's developer conference. Facebook is down about 2.6 percent this year amid the user privacy scandal and volatility among tech darlings including Apple Inc. and Google parent Alphabet Inc.

Sandler, 48, founded Eminence in 1999 and makes wagers on and against stocks, as well as taking an activist approach to some of its investments. Sandler said two years ago that his firm had invested in quantitative techniques and data science and that he “couldn't be happier with the results.”

“At a minimum, we have to use the power of computers and the power of data to make our stock pickers better,” he said. “As a tool to the fundamental guy, I think it's table stakes. I think you'll be at a huge disadvantage to people that are using human power augmented by powerful computers.”

Eminence, which is based in New York, has about 90 short positions in its portfolio and has a dedicated team that bets against securities. Sandler says he pays his money managers twice for making money on short trades, as the position sizes are about half as big.

--With assistance from Saijel Kishan and Erik Schatzker

To contact the reporter on this story: Kristy Westgard in New York at kwestgard1@bloomberg.net.

To contact the editors responsible for this story: Arie Shapira at ashapira3@bloomberg.net, Margaret Collins at mcollins45@bloomberg.net, Josh Friedman, Vincent Bielski

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