Barry Rosenstein's Jana Partners: Hedge Fund Tracking - 13 F Filing Q3 2008 ~ market folly

Tuesday, December 23, 2008

Barry Rosenstein's Jana Partners: Hedge Fund Tracking - 13 F Filing Q3 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.

Next up is Jana Partners. Ran by Barry Rosenstein, Jana was recently ranked 79th in Alpha's Hedge Fund Rankings. Jana was founded in 2001 and typically employs activist, market neutral, and long/short equity strategies in public equity markets. Rosenstein received his BS from Lehigh University and his MBA from the Wharton School of Business at the University of Pennsylvania. Jana has returned 20.9% each year annualized from 2001 til 2007. Rosenstein sees Jana's future in a strategy that uses management adjustments to force change at companies, which in turn can send shares higher. A few months back in our hedge fund performance numbers update, we noted that Jana's piranha fund was -19.2% for October and was -21.7% for the year at that time. Additionally, their Nirvana fund fell 13.2% in October and was down 21.9% ytd at that time. Lastly, the Jana Partners fund had a much better October than their other funds, being down 6.6% for that month, but was still down 20.4% for the year at that time. As you can see, a big chunk of their losses came solely from the month of October. As we posted earlier, Jana has hit a rough patch this year and is on track for its first yearly loss ever. We've also recently covered some of Jana's big moves, including taking a 13.52% ownership stake in Convergys (CVG) and a 5.7% ownership stake in Hayes Lemmerz (HAYZ).

The following were their long equity, note, and options holdings as of September 30th, 2008 as filed with the SEC. All holdings are common stock unless otherwise denoted.

Some New Positions (Brand new positions that they initiated in the last quarter):
Aetna (AET)
Wells Fargo (WFC)
Pfizer (PFE)
Marathon Oil (MRO)
Bank of America (BAC)
Ace (ACe)
Regional Bank Holdrs (RKH)
Cigna (CI)
Telephone & Data (TDS)
KBW Regional Banking ETF (KRE)
Select Sector Financial ETF (XLF) Calls
Quanex Building (NX)
Microsoft (MSFT) Calls
Medarex (MEDX)
Teletech Holdings (TTEC)
John Bean Tech (JBT)
T Rowe Price (TROW)
Holly (HOC)
McDonalds (MCD)
JDA Software (JDAS)
X-rite (XRIT)
Lehman Brothers (LEHMQ)

Some Increased Positions (A few positions they already owned but added shares to)
Hanover Insurance (THG): Increased position by 117%
Medicis Pharma (MRX): Increased position by 76%
Invitrogen (IVGN): Increased position by 62%
Williams Companies (WMB): Increased position by 33%
Commscope (CTV): Increased position by 32%
Graphic Packaging (GPK): Increased position by 28%
Convergys (CVG): Increased position by 50%
Health Net (HNT): Increased position by 29%
Corel (CREL): Increased position by 19.5%
Hayes Lemmerz (HAYZ): Increased position by 12%
Agilysys (AGYS): Increased position by 10%
Maximus (MMS): Increased position by 9%

Some Reduced Positions (Some positions they sold some shares of - note not all sales listed)

Focus Media (FMCN): Reduced position by 73%
KBR (KBR): Reduced position by 68%
AK Steel (AKS): Reduced position by 62%
Shire (SHPGY): Reduced position by 61%
Xerium Tech (XRM): Reduced position by 51%
M&F Worldwide (MFW): Reduced position by 42%
Chubb (CB): Reduced position by 23%
MF Global (MF): Reduced position by 20%
HCC Insurance (HCC): Reduced position by 9%

Removed Positions (Positions they sold out of completely)
Comstock Resources (CRK)
Cisco Systems (CSCO)
Anadarko Petroleum (APC) Calls
Taiwan Semi (TSM)
Conoco Phillips (COP) Puts
United Health (UNH)
Forest Oil (FST)
Nokia (NOK)
Devon Energy (DVN)
Hess (HES) Calls
National Oilwell Varco (NOV)
Equitable Resources (EQT)
First American (FAF)
Genentech (DNA)
Century Aluminum (CENX)
Oracle (ORCL)
Omnicare (OCR)
Sandridge Energy (SD)
Microsoft (MSFT)
Transocean (RIG)
Peabody Energy (BTU)
Consol Energy (CNX)
Anadarko Petroleum (APC)
Commercial Metals (CMC)
Cnet - inactive
Talisman Energy (TLM)
Hess (HES)
Calpine (CPN)
Select Sector Energy (XLE) Puts
iShares Russell 2000 index (IWM) Puts

Top 20 Holdings (by % of portfolio)

  1. Copart (CPRT): 12.3% of portfolio
  2. Convergys (CVG): 10.8% of portfolio
  3. Health net (HNT): 7.5% of portfolio
  4. HCC Insurance (HCC): 5.1% of portfolio
  5. Invitrogen (IVGN): 4.8% of portfolio
  6. Commscope (CTV): 4.6% of portfolio
  7. Williams Companies (WMB): 4% of portfolio
  8. Aetna (AET): 3.9% of portfolio
  9. Chubb (CB): 3% of portfolio
  10. Wells Fargo (WFC): 2.8% of portfolio
  11. American Italian Pasta (AITP): 2.3% of portfolio
  12. Pfizer (PFE): 1.9% of portfolio
  13. Ak Steel (AKS): 1.9% of portfolio
  14. Marathon Oil (MRO): 1.9% of portfolio
  15. Bank of America (BAC): 1.8% of portfolio
  16. MF Global (MF): 1.8% of portfolio
  17. Ace (ACE): 1.8% of portfolio
  18. Regional Bank Holdrs (RKH): 1.8% of portfolio
  19. NBTY (NTY): 1.7% of portfolio
  20. Maximus (MMS): 1.6% of portfolio

Assets from the collective holdings were $5.89 billion last quarter and were $2.14 billion this quarter. So, they definitely decreased their long US equity exposure by a good amount, like many other hedge funds we've covered. And, for the most part, they were selling entire positions rather than partial positions. Please note that we have not detailed changes to every single position in this update, but we have covered all the major moves. Also, keep in mind that these filings only include long equity, notes, and options holdings. They do not reflect their cash, short portions, or holdings in other markets (currency, commodities, debt, foreign markets, etc). This is just one of many funds in our hedge fund tracking series in which we're tracking 35+ prominent funds. The other funds we've already covered include:

Overall, its been one of the worst years ever for hedge funds, as we noted in our new November hedge fund performance number 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 Rosenstein / Jana Partners:
- Jana has hit a rough patch this year
- Jana takes 13.52% ownership stake in Convergys (CVG)
- Jana discloses 5.7% ownership stake in Hayes Lemmerz (HAYZ)
- Hedge Fund Rankings
- November hedge fund performance numbers
- October hedge fund performance numbers

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