This is the 3rd Quarter 2008 edition of our ongoing hedge fund tracking series. Before reading this update, make sure you check out the preface to the series we're doing on Hedge Fund 13F's here. We're aiming to cover 35 or so prominent funds this time around and we'll be releasing the 13f analysis of each individual fund here in the coming weeks. We've already covered Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bill Ackman's Pershing Square, Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, Timothy Barakett's Atticus Capital, John Griffin's Blue Ridge Capital, and Bret Barakett's Tremblant Capital. Next up, we have John Paulson's Paulson & Co. Paulson & Co is famous for making a fortune by betting against sub-prime when this whole mess began to unfold. And, it appears as if Paulson is still up to his fortune-making ways. One of his funds has generated a 589% return, which could easily be up there amongst the largest returns by a single hedge fund in a year. Paulson's Advantage Plus fund has returned 19.44% year-to-date as of the end of August. This is the same fund that gained 158% the year prior and has grown to almost $9 billion.
Paulson's bet against sub-prime has paid off and he has recently reversed course on that bet and has started to buy the assets he was previously short. In addition to his dances in sub-prime, Paulson recently disclosed a 14.6% stake in Cheniere Energy (LNG). And, prior to that, it was revealed that he was short UK banks. As we noted in our October hedge fund performance update, Paulson & Co's advantage plus fund was up 29.4% at the end of October. And, a week ago, Paulson went before Congress to testify with regards to the hedge fund industry.
The following were Paulson's long equity and options holdings as of September 30th, 2008 as filed with the SEC.
New Positions (Brand new positions that they initiated in the last quarter):
Applied Biosystems (ABI)
Anheuser Busch (BUD)
Rohm & Haas (ROH)
Barr Pharma (BRL)
Genentech (DNA)
BCE inc (BCE)
Merrill Lynch (MER)
NRG Energy (NRG)
Brocade Comm (BRCD)
Time Warner Cable (TWC)
Hercules (HPC)
Added to (Positions they already held but added shares)
none
Reduced Positions (Positions they sold some shares of - note not all sales listed)
Mirant (MIR): Reduced position by 6%
Philip Morris Intl (PM): Reduced position by 14%
Macrovision Solutions (MVSN): Reduced position by 38%
Positions with no change
Boston Scientific (BSX)
Kinross Gold (KGC)
Wrigley
Dr. Pepper Snapple (DPS)
Affiliated Computer (ACS)
Cheniere Energy (LNG)
Equity Media Holdings (EMDA)
Tronox (TROXB)
Removed Positions (Positions they sold out of completely)
WH Energy Services (WHQA)
Hercules Offshore (HERO)
Navteq (NVT)
Choicepoint (CPS)
Applera
Nymex (NMX)
Bank of America (BAC)
EDS (EDS)
Yahoo (YHOO)
Clear Channel (CCU)
Top 20 Holdings (by % of portfolio)
- Anheuser Busch (BUD): 25.8% of portfolio
- Rohm & Haas (ROH): 14.8% of portfolio
- Boston Scientific (BSX): 14.5% of portfolio
- Barr Pharma (BRL): 9% of portfolio
- Kinross Gold (KGC): 6.5% of portfolio
- Applied Biosystems (ABI): 4.8% of portfolio
- Mirant (MIR): 4.8% of portfolio
- Genentech (DNA): 4.2% of portfolio
- Philip Morris Intl (PM): 4% of portfolio
- Wrigley: 3.9% of portfolio
- BCE (BCE): 2.7% of portfolio
- Merrill Lynch (MER): 1.3% of portfolio
- NRG Energy (NRG): 0.7% of portfolio
- Brocade Comm (BRCD): 0.6% of portfolio
- Dr Pepper Snapple (DPS): 0.6% of portfolio
- Time Warner Cable (TWC): 0.5% of portfolio
- Macrovision Solutions (MVSN): 0.3% of portfolio
- Hercules (HPC): 0.28% of portfolio
- Affiliated Computer (ACS): 0.25% of portfolio
- Cheniere Energy (LNG): 0.15% of portfolio
Assets listed in the long portfolio this quarter were a little over $7 billion when compared to last quarter's $5.7 billion or so. It definitely looks as if Paulson is trying to play it "safe" in the equity markets by betting on mergers he thinks will still get done despite the credit crisis. His large stakes in ROH and BUD clearly illustrate that. Please note that Paulson's holdings are not necessarily primarily in equity markets, as they operate in numerous other markets. Also, keep in mind that these filings only include long equity and options holdings and do not reflect the cash or short equity portions of their portfolio. This is the tenth hedge fund we've covered in our 3rd quarter 2008 edition of our hedge fund tracking series in which we're tracking 35+ prominent funds. We've already covered Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bill Ackman's Pershing Square, Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, Timothy Barakett's Atticus Capital, John Griffin's Blue Ridge Capital, and Bret Barakett's Tremblant Capital. Overall, its been one of the worst years ever for hedge funds, as we noted in our recent October hedge fund performance update. Thus, the recent moves they've made in their portfolios become all the more interesting given the way the market has played out.
More on Paulson & Co:
- Hedge Fund October performance numbers
- Paulson's congressional testimony
- Paulson's stake in Cheniere Energy (LNG)
- Paulson & Co shorts UK banks
