Hedge Fund Tracking: George Soros (Soros Fund Management) - 13F Filing Q3 2008 ~ market folly

Monday, December 15, 2008

Hedge Fund Tracking: George Soros (Soros Fund Management) - 13F 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. We've already covered:

Next up is Soros Fund Management ran by George Soros. Soros is famous for his stellar returns with partner Jim Rogers when they ran their Quantum fund. Soros' fund is a switch from some of the more value oriented funds we've been covering, like the 'Tiger Cub' funds including Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, John Griffin's Blue Ridge Capital, and Andreas Halvorsen's Viking Global. Soros is more of a global macro player, seeking investments in whatever market they can gain an edge, whether it be equities, bonds, currencies, debt, commodities, and more. So, keep in mind that these equity positions only represent a portion of the fund's overall holdings. They are not required to disclose holdings outside of equities, notes, and stock options.

Soros is great to track because of his excellent macro sense and formidable track record as an investor. His thoughts on the current financial landscape are detailed in his latest book, The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means. Soros sees a vast consolidation in the hedge fund space in the near future, as we noted when we recently checked in on Jim Rogers & George Soros. As such, he testified before Congress recently regarding the hedge fund industry, which you can see via video here. If you want to hear some more insightful thoughts from George Soros himself, head over to our post on Hedge Fund manager interviews or check out his recent interview with Fareed Zakaria to discuss the current crisis. If you want to get a better sense as to how Soros' mind works, we highly recommend reading his first book, The Alchemy of Finance.

Before beginning, you might be interested in checking out Soros' portfolio holdings from Q2 2008. The following were Soros' 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):
Research in Motion (RIMM)
Arch Coal (ACI)
Ishares Real Estate (IYR)
Powershares QQQ (QQQQ)
Petroleo Brasileiro (PBR) Calls
Whiting Petroleum (WLL)
Global Ship Lease (GSL)
Suncor (SU)
Chesapeake (CHK)
RedHat (RHT) Notes
Best Buy (BBY)
Buffalo Wild Wings (BWLD)
Lattice Semiconductor (LSCC)
Anheuser Busch (BUD)
Frontline (FRO)
Vale (RIO) Calls
Unibanco (UBB)
Bank of America (BAC)
Collective Brands (PSS)
Companhia Siderurgica (SID)
Fidelity National Info (FIS)
Dr Pepper Snapple (DPS)
Entergy (ETR)
Suntrust (STI)
Global Ship Lease (GSL-WS)
Nasdaq (NDAQ)
General Growth Properties (GGP)
Teradata (TDC)

Some Increased Positions (A few positions they already owned but added shares to)
Walmart (WMT): Increased position by 519%
Consol Energy (CNX): Increased position by 428%
Schlumberger (SLB): Increased position by 400%
Emulex (ELX): Increased position by 279%
Hess (HES): Increased position by 277%
Potash (POT): Increased position by 91%
RF Micro (RFMDL): Increased position by 88%
Petroleo Brasileiro (PBR): Increased position by 84%

Some Reduced Positions (Some positions they sold some shares of - note not all sales listed)
JetBlue Airways (JBLU): Reduced position by 51%
Wind River (WIND): Reduced position by 46%
Symmetricom (SYMM): Reduced position by 40%
Auxilium Pharma (AUXL): Reduced position by 14%

Removed Positions (Positions they sold out of completely)
iShares Emerging Markets (EEM) Puts
Lehman Brothers (LEHMQ)
S&P500 (SPY) Puts
Talisman Energy (TLM)
Mosaic (MOS)
Energy Solutions (ES)
Monsanto (MON)
Halliburton (HAL)
BPZ Resources (BPZ)
Freeport McMoran (FCX)
Sandridge Energy (SD)
Bucyrus (BUCY)
Joy Global (JOYG)
Century Aluminum (CENX)
Weatherford (WFT)
Kroger (KR)
Tibco Software (TIBX)
National Oilwell Varco (NOV)
Patterson UTI Energy (PTEN)
Union Pacific (UNP)
McDermott (MDR)
Powershares QQQ (QQQQ) Puts
Costco (COST)
Intrepid Potash (IPI)
Net Servicos Comunicacao (NETC)

Top 20 Holdings (by % of portfolio)
  1. Petroleo Brasileiro (PBR): 24.3% of portfolio
  2. Potash (POT): 11.5% of portfolio
  3. Walmart (WMT): 6% of portfolio
  4. Hess (HES): 4.5% of portfolio
  5. Conoco Phillips (COP): 3.3% of portfolio
  6. RF Micro (RFMDL) 1st batch of Notes: 3.2% of portfolio
  7. Mercury Computer (MRCY) Notes: 3% of portfolio
  8. Audiocodes (AUDC) Notes: 2.9% of portfolio
  9. Research in Motion (RIMM): 2.9% of portfolio
  10. LSI Corp (LSI) Notes: 2.5% of portfolio
  11. RF Micro (RFMDL) 2nd batch of Notes: 2.5% of portfolio
  12. Arch Coal (ACI): 2.5% of portfolio
  13. Ishares Real Estate (IYR): 2.1% of portfolio
  14. Agere Systems (inactive) Notes - 2.1% of portfolio
  15. Powershares QQQ (QQQQ): 2% of portfolio
  16. Novell (NOVL) Notes: 2% of portfolio
  17. Mcdata (inactive) Notes: 1.9% of portfolio
  18. Red Hat (RHT) Notes: 1.4% of portfolio
  19. Schlumberger (SLB): 1.1% of portfolio
  20. MAP Pharma (MAPP): 1.1% of portfolio

Assets from the collective holdings were $3.6 billion last quarter and were $3.8 billion this quarter. Soros definitely has a lot of Note holdings, opting to take positions in those rather than common stock. Please note that we have not detailed every single change 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 and do not reflect their cash, short portions, or holdings in other markets (currency, commodities, debt, etc). This is just one of many funds in 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, Bret Barakett's Tremblant Capital, Andreas Halvorsen's Viking Global, John Paulson's Paulson & Co, David Einhorn's Greenlight Capital, and Dan Loeb's Third Point, Paul Tudor Jones' Tudor Investment Corp, Louis Bacon's Moore Capital Management, and Bruce Kovner's Caxton Associates. Overall, its been one of the worst years ever for hedge funds, as we noted in our new November 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 Soros:
- Soros' books: The Alchemy of Finance / The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means
- Checking in on George Soros & Jim Rogers
- Soros interview with Fareed Zakaria
- November hedge fund performance numbers
- Soros testimony before Congress
- Soros Q2 holdings
- October hedge fund performance numbers
- Hedge Fund Rankings

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