Friday, September 19, 2014

Oaktree Capital Discloses Molycorp Stake

Howard Marks' investment firm Oaktree Capital has filed a 13G with the SEC regarding shares of Molycorp (MCP).  Oaktree now owns 9.1% of the company with over 24.47 million shares.

This is a newly disclosed stake and the filing was required due to activity on September 11th.  The filing notes that the shares beneficially owned are a result of direct ownership of 18,358,019 penny warrants and 6,119,340 Oaktree Warrants which are defined in the filing here.

If you haven't already, be sure to check out Howard Marks' book: The Most Important Thing.

Per Google Finance, Molycorp is "provides Rare Earths and Molybdenum products to companies. The Company's rare earth products comprise of bastnasite, cerium, europium, lanthanum, neodymium, praseodymium, yttrium, and other lanthanides."

Bruce Berkowitz's Fairholme Buys Sears Shares

Bruce Berkowitz's firm Fairholme Capital just filed a 13D with the SEC regarding shares of Sears Holdings (SHLD).  Per the filing, Fairholme now owns 24% of SHLD with over 25 million shares.

This means Berkowitz has added to his position size by over 850k shares since the end of the second quarter.  He's been a long-term Sears shareholder and shares have nosedived from $45 earlier in the year down to current levels of under $27.

The vast majority of this decline has been in recent days as news came out that the company was borrowing $400 million from its CEO Eddie Lampert's hedge fund (ESL Investments).  This has prodded fears that the company could eventually be in trouble.

Berkowitz was buying in early September around $32.28 but then ramped up purchases on September 5th and 8th around $33.21. It will be interesting to see if he ramps up his purchases even further now that shares are even lower.

Fairholme's filing also notes that one of their other investments is potentially involved here: St. Joe (JOE).  The filing indicates that, "The St. Joe Company, an affiliate of the Fund and Fairholme, is in discussions with the Issuer regarding the $400 million secured short-term loan disclosed on the 8-K filed by the Issuer on September 15, 2014.  The St. Joe Company may invest up to $100 million in participations relating to theShort Term Loan."

Berkowitz's 13D filing didn't note any other plans or proposals at this time.

Per Google Finance, Sears Holdings is "is a retailer with 2,172 full-line and 1,338 specialty retail stores in the United States operating through Kmart Holding Corporation (Kmart) and Sears, Roebuck and Co. (Sears) and 500 full-line and specialty retail stores in Canada operating through Sears Canada Inc. (Sears Canada), a 95%-owned subsidiary. The Company operates in three segments: Kmart, Sears Domestic and Sears Canada."

What We're Reading ~ Hedge Fund Links 9/19/14

Brevan Howard's Charlotte Valeur talks strategy [FINalternatives]

Seth Klarman cautions against complacency bubble [ValueWalk]

Picking hedge funds is hard [Abnormal Returns]

Highland Capital on whether the bull market in US airlines will continue [Harvest]

Don't forget the 'hedge' in hedge fund [First Adopter]

The beginning of the end of the hedge fund gravy train [Abnormal Returns]

Profile of ValueAct / Jeff Ubben [Fortune]

The (obscene) cost of hedge funds [FT Alphaville]

Trian makes case to split up DuPont [WSJ]

Tiger Ratan's Chopra stumbles in rise to top [Bloomberg]

Hedge fund's equity titans come unstuck in Europe [eFinancial News]

Activist investors build up their war chests [WSJ]

Alibaba gets interest from Tepper, Loeb, Cooperman [CNBC]

Oaktree fund betting big on economic downturn [CNBC]

Puerto Rico finds it has new friends in hedge funds [Dealbook]

Most hedge fund managers are overpaid [Bloomberg]

CFTC eases hedge fund advertising ban [WSJ]