Multifamily office CAZ boosts transport strategy with Uber stock bet

  • Why this is important: Family office bets on rideshare IPO as part of broader transport strategy

CAZ Investments, a multifamily office with about $1.3 billion under management, earlier this month made a play on Uber’s stock.

“We had not invested in the private markets, but based on the dislocation that occurred post the IPO, we [initiated] a position in Uber in one of our vehicles,” Chairman and CIO Christopher Zook told Buyouts.

Uber went into its May 10 IPO valuing its stock at $45 a share, only to see it fall 7.6 percent in its first day on the market, with many investors like BlackRock and Tiger Global selling their stock before or as part of the IPO.

Since then, the stock has traded as high as $43, and early this week is hovering under $42.

Zook said the response after the IPO was what prompted CAZ to buy the stock.

“Once the stock traded out in the IPO, obviously you got what you call a whoosh, where everybody was like, ‘oh my gosh, I can’t believe we got suckered into buying this thing, just get me out.’ …And that whoosh, of course, was very, very painful for people. So when the stock got into the $36, $38 range, we just felt like it was time to start developing a position there,” he said.

Zook and CAZ did not disclose what vehicle the purchase was made in or how much stock CAZ bought.

“The stock, of course, has rallied back to $42-and-change right now,” he said.  If the stock “gets down in the low 30s, we’re probably going to get really aggressive. [If] it gets in the high 20s, we’ll probably back up the pickup truck.”

Zook told Buyouts last year that transportation is a major theme in its investment strategy. He reiterated that in an interview last week.

“We believe the transport revolution, with rideshare being the most actionable, is a generational change,” he said. “It is going to be different for children that are born today compared to the children that are 16 now.”

CAZ Investments, formed in 2001, is made up of 24 families’ portfolios plus $300 million of their own capital.

SEC records indicate CAZ owns public stock in KKR, Dropbox, Blackstone Group, De Frisco’s Restaurant Group, Spotify and Docusign, among others.

The firm has also invested in Uber competitor Lyft, EnCap Investments, Vista Equity Partners and Silver Lake, according to its website.