Hedge Fund Harbinger Capital Adds to Crosstex Energy (XTXI)

Per a 13G filed with the SEC, Philip Falcone's hedge fund Harbinger Capital Partners has updated its stake in Crosstex Energy (XTXI). Due to portfolio activity on August 17th, 2010, Harbinger has disclosed an 8.1% ownership stake in XTXI with 3,804,916 shares. This is a massive increase in their position because back on June 30th, they only owned 213,600 shares. As such, Harbinger has boosted its stake by over 1,681% in the past two months, adding 3,591,316 more shares.

Taken from Google Finance, Crosstex Energy is "engaged, through its subsidiary, Crosstex Energy, L.P. (Partnership), the gathering, transmission, processing and marketing of natural gas and natural gas liquids (NGL). The Partnership operates two segments: Midstream and Treating. Its combined midstream assets consist of over 3,300 miles of natural gas gathering and transmission pipelines, nine natural gas processing plants and three fractionators located in two primary regions: north Texas and Louisiana."

You can view all of our previous coverage of Harbinger's portfolio here.

John Paulson Files Activist 13D on NovaGold Resources (NG)

As we've detailed in the past, John Paulson's hedge fund has owned NovaGold Resources (NG). But per a recent SEC filing, we get an update on his stake. Paulson & Co has disclosed a 9.1% ownership stake in NovaGold Resources (NG) with 20,181,818 shares. The filing was made due to activity on August 31st, 2010 and keep in mind that a 13D signifies activist intent. In the past, this had merely been a passive stake for Paulson.

His hedge fund originally acquired NG shares in an offering at $5.50 per share. However, his most recent position size is the same as it was back on June 30th, so he has not added to the stake recently. This NG position is undoubtedly part of Paulson's strategy to take equity stakes in gold miners via his new gold fund. Other recent gold related portfolio activity from Paulson includes a reduction in his Centamin Egypt position. We'll have to monitor as to what kind of activist agenda Paulson potentially has with his NovaGold stake, seeing how there were no intentions outlined in the filing itself.

Taken from Google Finance, Novagold Resources is "a precious metals company, which is engaged in the exploration and development of mineral properties in Alaska, the United States and British Columbia, Canada. The Company conducts its operations through wholly owned subsidiaries, partnerships and joint ventures. The Company is primarily focused on gold properties, some of which also have copper, silver and zinc resources."

Make sure to check out all of Paulson & Co's recent portfolio changes in our new quarterly newsletter: Hedge Fund Wisdom by Market Folly.

Paolo Pellegrini & PSQR Capital's Last Insight Before Returning Capital

As many of you are already aware, Paolo Pellegrini's hedge fund PSQR Capital is returning outside investor capital. He is winding down because he believes that "substantial additional work" will be needed to profit from his global macro strategy. The investment vehicle will continue to manage Pellegrini's own money in the mean time. Through the end of July, PSQR was down over 10% for the year.

Pellegrini of course gained his claim to fame by calling the housing bubble while working with John Paulson at hedge fund firm Paulson & Co. Their collective story is chronicled in Gregory Zuckerman's enticing book, The Greatest Trade Ever. Afterward, Pellegrini struck out on his own, founding PSQR Capital. While he's currently closing to outside investors, he may re-open at some point in the future.

Given PSQR's abrupt closure to outside investors, we thought it would be prudent to examine Pellegrini's most recent thoughts via his last market commentary and analysis. Since we may not see his thoughts for an extended period of time, global macro enthusiasts are encouraged to soak this all in. Pellegrini's second quarter letter focuses on his brief notion that "equities will retrace further". On the policy side of things, he feels the government is digging the hole deeper and that using sovereign debt instead of private debt is the wrong move.

In terms of scanning the economy, Pellegrini highlights that workers' pay still lags and since consumer spending makes up such a large part of our economy, we're in for continued rough waters. This ties into his past concern that so few people are saving money these days. He goes on to write, "While some feel that the economy has stabilized and can only go up - and all the faster because it is rebounding from such a low level - the reality is that the exceptional amount of government borrowing has failed to add up to final demand sufficient to spur economic activity to anything approaching the cyclical upswings typical of post-war recoveries."

Embedded below is PSQR Capital's second quarter letter to (now former) investors:



You can download a .pdf copy here.

You can view the rest of Pellegrini's past commentary here. To see what other prominent hedge funds have been buying and selling, check out our brand new quarterly newsletter: hedge fund wisdom.