Bruce Kovner's Caxton Associates: Hedge Fund Tracking Q3 2008 - 13F Filing ~ market folly

Wednesday, December 10, 2008

Bruce Kovner's Caxton Associates: Hedge Fund Tracking Q3 2008 - 13F Filing

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 Bruce Kovner's Caxton Associates. The $10 billion firm is one of many global macro oriented funds which we cover. This 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. Global macro funds seek to find 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.

Kovner comes from the group of "offspring" of the legendary Commodities Corp. Kovner emerged as a successful offspring along with fellow great macro traders Paul Tudor Jones (Tudor Investment Corp), and Louis Bacon (Moore Capital Management). If you want to hear some insightful thoughts from Bruce Kovner himself, head over to our post on Hedge Fund manager interviews. Taken from Wikipedia, Kovner's bio is as follows: "Kovner's first trade was for $3,000, borrowed against his MasterCard, in soybean futures contracts. Realizing growth to $40,000, he then watched the contract drop to $23,000 before selling. He later claimed that this first, nerve-racking trade taught him the importance of risk management. In his eventual role as a trader under the legendary Michael Marcus at Commodities Corporation (now part of Goldman Sachs), he purportedly made millions and gained widespread respect as an objective and sober trader. This ultimately led to the establishment of his current company, Caxton Associates, in 1983, which today manages over $10 billion in capital and has been closed to new investors since 1992." As of the end of October, Caxton's Global Investment Fund was up 7.25%.

Before beginning, you might be interested in checking out Caxton's portfolio holdings from Q2 2008. Also, we noted that Caxton had recently boosted their stake in Ferro (FOE) to 5.2%. The following were Caxton's long equity, note, 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):
Grey Wolf (GW)
Ikon Office (IKN)
Campbell Soup (CPB)
Scripps Networks (SNI)
JP Morgan Chase (JPM-PA)
PPG Industries (PPG)
Hewlett Packard (HPQ)
Lorillard (LO)
Waste Management (WMI)
Vivus (VVUS)
Lazard (LAZ)
NDS Group (NNDS)
Greenfield Online (SRVY)
Reinsurance Group of America Class B (RGA-B)
IAC Interactive (IACI)
HSBC Holdings (HBC)
Secure Computing (SCUR)
Genentech (DNA)
Winnebago (WGO)
Amgen (AMGN)
Penn National Gaming (PENN)
HILB Rogal & Hobbs (HRH) - no longer active on NYSE
Georgia Gulf (GGC)
Ishares Natural Resources (IGE)
Delta Airlines (DAL)
Financials ETF (XLF)
Scholastic (SCHL)
Northwest Airlines (NWA)
Anadarko Petroleum (APC)
Devon Energy (DVN)

Added to (Positions they already owned but added shares to)
JP Morgan Chase (JPM): Increased stake by 2991%
Freeport McMoran (FCX): Increased stake by 870%
Ferro (FOE): Increased stake by 824%
Charles Schwab (SCHW): Increased stake by 257%
Walmart (WMT): Increased stake by 242%
Metlife (MET): Increased stake by 145%
Symantec (SYMC): Increased stake by 145%
Medco Health (MHS): Increased stake by 92%
Altria (MO): Increased stake by 60%
Republic Services (RSG): Increased stake by 44%
Ariba (ARBA): Increased stake by 28%
Raytheon (RTN): Increased stake by 15%
XTO Energy (XTO): Increased stake by 5%

Some Reduced Positions (Positions they sold some shares of - note not all sales listed)
DirecTV (DTV): Reduced position by 51%
Coca Cola (KO): Reduced position by 42%
Estee Lauder (EL): Reduced position by 36%
Gilead Sciences (GILD): Reduced position by 32%
Schlumberger (SLB): Reduced position by 32%
General Mills (GIS): Reduced position by 26%
Union Pacific (UNP): Reduced position by 24%
Total (TOT): Reduced position by 20%
Omnicom (OMC): Reduced position by 16%
W.R. Grace (GRA): Reduced position by 7.5%
Berkshire Hathaway (BRK.A): Reduced position by 6%

Removed Positions (Positions they sold out of completely)
Oil Services ETF (OIH)
Kraft (KFT)
Alcoa (AA)
Gardner Denver (GDI)
Apple (AAPL)
Baldor Electric (BEZ)
Tesoro (TSO)
Taiwan Semiconductor (TSM)
Innophos Holdings (IPHS)
Deere (DE)
Brookfield Asset Management (BAM)
Liberty Media (LMDIA)
Clear Channel (CCU)
Electronic Data Systems (EDS-PI)
Activision (old shares before merger with Blizzard)
Lowes (L)
WH Energy (WHQA) - inactive
Choicepoint (CPS)
Monsanto (MON)
Rural Cellular (RCCCO)
Research in Motion (RIMM)
Nucor (NUE)
NRG Energy (NRG)
US Steel (X)
Pioneer Natural Resources (PXD)
Mastercard (MA)
Exelon (EXC)
MGM Mirage (MGM)

Top 20 Holdings (by % of portfolio)

  1. JPMorgan Chase (JPM): 8.05% of portfolio
  2. Grey Wolf (GW): 4.5% of portfolio
  3. Metlife (MET): 3.9% of portfolio
  4. Ikon Office (IKN): 3.1% of portfolio
  5. Service Corp (SCI): 2.7% of portfolio
  6. Campbell Soup (CPB): 2.4% of portfolio
  7. Ferro (FOE): 2.0% of portfolio
  8. Autozone (AZO): 1.9% of portfolio
  9. Berkshire Hathaway (BRK.A): 1.8% of portfolio
  10. Altria Group (MO): 1.8% of portfolio
  11. Walmart (WMT): 1.8% of portfolio
  12. W.R. Grace (GRA): 1.7% of portfolio
  13. Wells Fargo (WFC): 1.7% of portfolio
  14. Scripps Networks (SNI): 1.7% of portfolio
  15. XTO Energy (XTO): 1.7% of portfolio
  16. Raytheon (RTN): 1.6% of portfolio
  17. Coca Cola (KO): 1.6% of portfolio
  18. Philip Morris International (PM): 1.6% of portfolio
  19. Union Pacific (UNP): 1.5% of portfolio
  20. Omnicom (OMC): 1.5% of portfolio

Assets from the collective holdings were $6.5 billion last quarter and were only $2.2 billion this quarter. Much like fellow Commodities Corp 'offspring' Paul Tudor Jones and Louis Bacon, Kovner was also decreasing exposure to equities all across the board. 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, and Louis Bacon's Moore Capital Management. Overall, its been one of the worst years ever for hedge funds, as we noted in our recent 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 Kovner & Caxton:
- Caxton's portfolio holdings from Q2 2008
- Caxton boosts stake in Ferro (FOE)
- November hedge fund performance numbers
- October hedge fund performance numbers
- Hedge Fund Rankings

blog comments powered by Disqus