‘Bottom is in’: Aussie hedge fund GCQ bets $143 million on beaten-down software stocks
GCQ Funds Management believes that the 'bottom' is in place for the sell-off seen in software stocks globally, taking decisive stance on the ongoing volatility in software and technology equities
- Feb 27, 2026,
- Updated Feb 27, 2026 11:46 AM IST
Sydney-based hedge fund GCQ Funds Management believes that the 'bottom' is in place for the sell-off seen in software stocks globally, taking decisive stance on the ongoing volatility in software and technology equities The firm acquired about $143 million (Rs 1,300.60 crore) in technology stocks affected by the market downturn, with confidence in the sector’s recovery potential.
To fund these purchases, GCQ redirected capital from some of its top-performing holdings, notably European luxury goods companies, into software stocks experiencing sharp declines. Chief Investment Officer Doug Tynan highlighted recent acquisitions of shares in Microsoft Corp, Intuit Inc, and SAP SE.
The turbulence was triggered after new tools from AI company Anthropic raised questions about the sustainability of software business models. In February, software giants like Salesforce and Adobe saw notable sell-offs. Recently, these stocks have shown early signs of stabilisation, with a software stocks-linked ETF on the S&P 500 climbing 2% overnight, though it remains 30% below its previous high.
Tynan described the sell-off as 'one of the most illogical market sell-offs I have ever seen'. He added, "One of the strangest days in markets I’ve ever seen was Monday this week when a hypothetical science fiction scenario from someone I’ve never heard of not only dropped the market, it caused the White House to comment," referring to Citrini’s post. "That was the bottom — that’s my call."
Despite these assertive moves, GCQ is contending with challenges of its own. One of its significant holdings, Swedish property portal Hemnet Group AB, has fallen over 70% from its 2025 peak. Nevertheless, the fund attracted its highest monthly inflow on record with an A$50 million increase last month.
GCQ’s repositioning reflects its belief that the sharp downturn presented an opportunity. While the ETF rebound may hint at stabilisation, market sentiment remains cautious. The CIO’s remarks that the "bottom" is in place for the sector reflect the fund’s conviction in the resilience and future recovery of technology stocks.
The AI revolution has cast a shadow over the long-term growth outlook for IT services. This is an additional pressure in the current down-cycle. IT sectors across the board and segment have been falling lately, hitting new lows recently. Nifty IT index has tumbled more than 25 per cent from its 52-week highs.
Within defensives, IT service is leading the cyclical P/E de-rating, accentuated by AI-related disruption fears; FMCG too saw a gradual erosion in P/E multiples, said Vinod Karki, Equity Strategist at ICICI Securities. "Equity markets are exhibiting the classical behaviour of market cap share following profit share in the economy – driven by cyclical factors such as the capex cycle, credit cycle and discretionary consumption."
Sydney-based hedge fund GCQ Funds Management believes that the 'bottom' is in place for the sell-off seen in software stocks globally, taking decisive stance on the ongoing volatility in software and technology equities The firm acquired about $143 million (Rs 1,300.60 crore) in technology stocks affected by the market downturn, with confidence in the sector’s recovery potential.
To fund these purchases, GCQ redirected capital from some of its top-performing holdings, notably European luxury goods companies, into software stocks experiencing sharp declines. Chief Investment Officer Doug Tynan highlighted recent acquisitions of shares in Microsoft Corp, Intuit Inc, and SAP SE.
The turbulence was triggered after new tools from AI company Anthropic raised questions about the sustainability of software business models. In February, software giants like Salesforce and Adobe saw notable sell-offs. Recently, these stocks have shown early signs of stabilisation, with a software stocks-linked ETF on the S&P 500 climbing 2% overnight, though it remains 30% below its previous high.
Tynan described the sell-off as 'one of the most illogical market sell-offs I have ever seen'. He added, "One of the strangest days in markets I’ve ever seen was Monday this week when a hypothetical science fiction scenario from someone I’ve never heard of not only dropped the market, it caused the White House to comment," referring to Citrini’s post. "That was the bottom — that’s my call."
Despite these assertive moves, GCQ is contending with challenges of its own. One of its significant holdings, Swedish property portal Hemnet Group AB, has fallen over 70% from its 2025 peak. Nevertheless, the fund attracted its highest monthly inflow on record with an A$50 million increase last month.
GCQ’s repositioning reflects its belief that the sharp downturn presented an opportunity. While the ETF rebound may hint at stabilisation, market sentiment remains cautious. The CIO’s remarks that the "bottom" is in place for the sector reflect the fund’s conviction in the resilience and future recovery of technology stocks.
The AI revolution has cast a shadow over the long-term growth outlook for IT services. This is an additional pressure in the current down-cycle. IT sectors across the board and segment have been falling lately, hitting new lows recently. Nifty IT index has tumbled more than 25 per cent from its 52-week highs.
Within defensives, IT service is leading the cyclical P/E de-rating, accentuated by AI-related disruption fears; FMCG too saw a gradual erosion in P/E multiples, said Vinod Karki, Equity Strategist at ICICI Securities. "Equity markets are exhibiting the classical behaviour of market cap share following profit share in the economy – driven by cyclical factors such as the capex cycle, credit cycle and discretionary consumption."