Hedge Fund Tracking: Timothy Barakett's Atticus Capital - 13F Filing 3rd Quarter 2008 ~ market folly

Monday, November 24, 2008

Hedge Fund Tracking: Timothy Barakett's Atticus Capital - 13F Filing 3rd Quarter 2008

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'll be bringing you the long equity portfolios of numerous prominent hedge funds. Hedge funds we track here at MarketFolly.com include: Tudor Investment Corp, Greenlight Capital, Blue Ridge Capital, Moore Capital Management, and literally many, many more. 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, and Lee Ainslie's Maverick Capital.

Fund Background: Next up, we have Atticus Capital. Atticus Capital is a hedge fund ran by Timothy Barakett. In 2005, Atticus' funds were up a combined 45%. And, they finished well over 30% for 2006. Barakett founded the firm at age 26 in 1995 and focuses on taking large, concentrated positions in companies. One of Atticus' most famous investments was Phelps Dodge, a miner which was bought out by Freeport McMoran (FCX). At one point, Atticus owned more than 9% of Phelps. And, they continue to hold some of their position in what is now the combined FCX. Barakett received his BA in Economics from Harvard and his MBA from Harvard as well. Its very evident that Barakett employs macro based investment theses. Once he has decided on what the trend is, he will find the best company within that trend and he will place a big bet. And, when needed, he will step in and take an activist role, ensuring the company is performing to his liking.

You may have heard about Atticus over the past few weeks because they have not been performing well at all this year. In our September hedge fund performance update, we noted that Atticus European was -42.5% for the year as of September while Atticus Global was -27.2% over the same timeframe. And, consequently, Atticus was a victim of liquidation rumors, which were quickly denied. We previously analyzed Atticus' portfolio holdings back in June and noticed that they had significant natural resource and mining positions at the time. We'll get into the details below, but you can take a guess as to where a lot of their losses are coming from this year. Overall, it's been one of the worst years for hedge funds in a long time. And although Atticus still exists as a fund, they have definitely had a rough year and have been selling off assets.

The following were Atticus' 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):
Russell 2000 Index (IWM) Puts
CSX Corp (CSX) Calls
Financial select sector (XLF) Puts

Added to (Positions they already owned but added more shares)
Vale (RIO) Calls
Emisphere Technologies (EMIS)

Reduced Positions (Positions they sold some shares of)
Union Pacific (UNP)
Crown Castle (CCI)
Nyse Euronext (NYX)
Occidental Petroleum (OXY)
Freeport McMoran (FCX)
Gold Fields (GFI)
Freeport McMoran (FCX) Calls
Newmont Mining (NEM)
Western Union (WU)
KT Corp (KTC)
Telekomunikasi Indonesia (TLK)
China Telecom (CHA)
Grupo Aeroportuario del Pacifico (PAC)
Grupo Aeroportuario del Sureste (ASR)
Sunair Services (SNE)
Petrochina (PTR)

Positions with no change
Synvista Therapeutics (SYI)

Removed Positions (Positions they sold out of completely)
Conoco Philips (COP)
Burlington Northern (BNI)
Conseco (CNO)
Peabody (BTU)
Mastercard (MA)
Norfolk Southern (NSC)
Genomic Health (GHDX)
Visa (V)
Focus Media (FMCN)
Nyse Euronext (NYX) Puts
Banco Itau (ITU)
Boeing (BA)
Canadian Natural Resources (CNQ)
Uhaul (UHAL)
Baidu (BIDU)
Banco Bradesco (BBD)
Companhia Saneamento Basico (SBS)
Praxair (PX)
National Financial Partners (NFP)
Unibanco (UBB)
Visa (V) Calls
Conoco Philips (COP) Calls
Clean Energy (CLNE)
General Motors (GM)
XTO Energy (XTO)
Marriott (MAR)
Starwood Hotels (HOT)
Nymex (NMX)
Cisco (CSCO)
Microsoft (MSFT)
American Tower (AMT)
Chesapeake (CHK)
Sandridge (SD)
Monsanto (MON)
Potash (POT)
Research in Motion (RIMM)
Apple (AAPL)
Google (GOOG)

Top 20 Holdings (by % of portfolio)

  1. CSX (CSX) Calls
  2. Vale (RIO) Calls
  3. Freeport McMoran (FCX) Calls
  4. Union Pacific (UNP)
  5. Financial select sector (XLF) Puts
  6. Crown Castle (CCI)
  7. Russell 2000 index (IWM) Puts
  8. Occidental Petroleum (OXY)
  9. NYSE Euronext (NYX)
  10. Newmont Mining (NEM)
  11. Freeport McMoran (FCX)
  12. Telekomunikasi Indonesia (TLK)
  13. Western Union (WU)
  14. Emisphere Technologies (EMIS)
  15. Gold Fields (GFI)
  16. China Telecom (CHA)
  17. Synvista Therapeutics (SYI)
  18. Grupo Aeroportuario del Sureste (ASR)
  19. KT Corp (KTC)
  20. Grupo Aeroportuario del Pacifico (PAC)

Atticus was definitely out liquidating a lot of assets. In the quarter prior, they had nearly $8 billion in their long equity portfolio. This quarter, they had only around $500 million worth of positions. That is some serious deleveraging and unwinding. This is the seventh 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, and Lee Ainslie's Maverick Capital.

Stay tuned this week and next week as we detail the portfolio holdings of more funds. 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. Here are some funds to look forward to that we will be tracking: David Einhorn's Greenlight Capital, Paul Tudor Jones' Tudor Investment Corp, Louis Bacon's Moore Capital Management, and many, many more.

More on Barakett & Atticus:
- Atticus Capital's 2nd quarter '08 portfolio holdings
- October Hedge Fund Performance update

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