Hedge Fund Tracking: Tudor Investment Corp (Paul Tudor Jones) - 13F Filing Q3 2008 ~ market folly

Monday, December 8, 2008

Hedge Fund Tracking: Tudor Investment Corp (Paul Tudor Jones) - 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, we have Paul Tudor Jones' Tudor Investment Corp. Tudor is a $17.7 billion global macro oriented set of hedge funds. The next few funds we will be covering are global macro oriented funds, which 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 differ from value funds in that they 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.

Taken from Wikipedia, the bio of PTJ is as follows: "In 1980 he founded Tudor Investment Corporation which is today a leading asset management firm headquartered in Greenwich, Connecticut. The Tudor Group, which consists of Tudor Investment Corporation and its affiliates, is involved in active trading, investing and research in the global equity, venture capital, debt, currency and commodity markets. One of Jones' earliest and major successes was predicting Black Monday in 1987, tripling his money during the event due to large short positions. Jones uses a global macro strategy when trading in some of his funds. This strategy can be seen in the 1987 PBS film "TRADER: The Documentary". The film shows Mr. Jones as a young man predicting the 1987 crash. Jones' firm currently manages$17.7 billion (as of June 1, 2007). Their investment capabilities are broad and diverse, including global macro trading, fundamental equity investing in the U.S. and Europe, emerging markets, venture capital, commodities, event driven strategies and technical trading systems." So, as you can see, PTJ is quite an accomplished gentleman, earning him the title of THE macro trader.

If you want to hear some insightful thoughts from Paul Tudor Jones himself, head over to our post on Hedge Fund manager interviews. Also, you can check out some additional thoughts from Paul here. Tudor hasn't had a bad year, relatively speaking, as his BVI Fund is only -5% for the year. Recently, Tudor was forced to halt withdrawals from their BVI Global Fund. Additionally, its worth noting that James Pallotta, who runs Tudor's equity focused Raptor fund (and is largely responsible for most of the holdings below), will be leaving to start his own fund.

Before beginning, you might be interested in checking out Tudor's portfolio holdings from the second quarter 2008. The following were Tudor'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):
Ishares Japan (EWJ)
Technology ETF (XLK)
Ishares Korea (EWY)
Activision Blizzard (ATVI)
Fomento Economico (FMX)
Financials ETF (XLF)
Macrovision Solutions (MVSN)
Ishares China (FXI)
Energy ETF (XLE)
Gold ETF (GLD)
Anixter International (AXE)
Hubbell Class B Common Stock (HUB.B)
Coach (COH)
Hartford Financial (HIG)
Utilities ETF (XLU)
Merck (MRK)
3Com (COMS)
Dell (DELL)
Ingram Micro (IM)
Lehman Brothers (LEHMQ)
Financials ETF (XLF) Calls
Jamba (JMBAW) Warrants
Lehman Brothers (LEHMQ) Calls

Added to (Positions they already owned but added shares to)
Petroleo Brasileiro (PBR): Increased position by 6800%
Cisco (CSCO): Increased position by 47%
Accenture (ACN): Increased position by 39%
Viacom (VIA-B) Class B: Increased position by 8%

Some Reduced Positions (Positions they sold some shares of - note not all sales listed)
Anadarko Petroleum (APC): Decreased position by 81.5%
Jamba (JMBA): Decreased position by 80%
Plains Exploration (PXP): Decreased position by 79%
Fidelity National (FIS): Decreased position by 79%
Healthcare ETF (XLV): Decreased position by 74%
Invesco (IVZ): Decreased position by 71%
ICO Global (ICOG): Decreased position by 62%
Heinz (HNZ): Decreased position by 57%
Ishares Emerging Markets (EEM): Decreased position by 47%
Consumer Staples ETF (XLP): Decreased position by 47%
Wyeth (WYE): Decreased position by 27%
Switch & Data (SDXC): Decreased position by 20%
Terrestar (TSTR): Decreased position by 14%

Removed Positions (Positions they sold out of completely)
Elan (ELN)
Mirant (MIR)
S&P500 (SPY)
Entergy (ETR)
Occidental (OXY)
NRG Energy (NRG)
Alcoa (AA)
Mastercard (MA)
Calpine (CPN)
Wellpoint (WPN)
Williams Companies (WMB)
Biogen Idec (BIIB)
Frontier Oil (FTO)
Apple (AAPL)
Knight Capital (NITE)
Activision (old shares converted into new ATVI combined company shares)
Walter Industries (WLT)
Steel Dynamics (STLD)
Priceline (PCLN)
Southwestern Energy (SWN)
Covidien (COV)
Devon Energy (DVN)
CSX Corp (CSX)
Verisign (VRSN)
Allegheny (AYE)
Marvell (MRVL)
DirecTV (DTV)
Qualcomm (QCOM)

Top 20 Holdings (by % of portfolio)

  1. Plains Exploration (PXP): 12.5% of portfolio
  2. Ishares Japan (EWJ): 11% of portfolio
  3. Anadarko Petroleum (APC): 8.6% of portfolio
  4. Heinz (HNZ): 7.9% of portfolio
  5. Progenics Pharma (PGNX): 6.9% of portfolio
  6. Wyeth (WYE): 4.8% of portfolio
  7. Invesco (IVZ): 4.1% of portfolio
  8. KBW Bank ETF (KBE): 3.7% of portfolio
  9. Fidelity National (FIS): 3.7% of portfolio
  10. Fibertower Corp (FTWR): 3.2% of portfolio
  11. Technology ETF (XLK): 2.8% of portfolio
  12. Taleo Corp (TLEO): 2.8% of portfolio
  13. Mako Surgical (MAK): 2.8% of portfolio
  14. Home Inns & Hotels (HMIN): 2.2% of portfolio
  15. Ishares Korea (EWY): 1.7% of portfolio
  16. Activision Blizzard (ATVI): 1.7% of portfolio
  17. Fomento Economico (FMX): 1.5% of portfolio
  18. Switch & Data (SDXC): 1.4% of portfolio
  19. Financial ETF (XLF): 1.4% of portfolio
  20. Terrestar (TSTR): 1.0% of portfolio

Assets from the collective holdings were $5.7 billion last quarter and were only $452 million this quarter. As you can see, Tudor shifted out of equities in a dramatic fashion. 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 the cash or short portions of their portfolio. 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. 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.

More on Tudor Investment Corp:
- Tudor halts withdrawals from its Global BVI Fund
- James Pallotta leaving Tudor to start own fund
- Tudor's 2nd quarter portfolio
- October hedge fund performance update
- Hedge Fund Rankings

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