Hedge fund Lone Pine Capital is launching a new concentrated long-term equity fund in response to shifting market dynamics caused by passive investing and multi-strategy hedge funds, according to a report by the Financial Times.

The $19bn firm, founded by Stephen Mandel, is committing $500m of its own capital to the fund, which will start accepting outside investors from January 2026. The strategy, named Lone Mountain Pine, will hold a maximum of 20 stocks at a time, focusing on companies capable of consistent long-term compounding, rather than chasing short-term momentum. Positions are expected to be held for five years or longer, according to investor documents.

Lone Pine, part of the so-called “Tiger cub” generation of investors trained under Julian Robertson’s Tiger Management, is seeking to exploit market dislocations created by high-frequency trading and the shift of trillions into index-tracking funds. The firm believes these dynamics have unmoored stock prices from fundamentals, creating opportunities for investors with the ability to maintain long-term positions.

The new fund allows quarterly redemptions, giving investors flexibility while potentially requiring the fund to adjust holdings if significant withdrawals occur. Lone Pine has a history of long-term stakes in major tech stocks, including Amazon, Meta, and Microsoft, which remain among its largest positions.

The launch coincides with a broader resurgence in alternative strategies – long-short hedge funds saw $37bn of net inflows in H1 2025, marking their strongest period in a decade. Lone Pine’s long-short fund has gained 23% year-to-date through September, while its long-only fund returned 26%.