Pequot Capital Management (Art Samberg): Hedge Fund Tracking - 13F Filing Q3 2008 ~ market folly

Tuesday, December 30, 2008

Pequot Capital Management (Art Samberg): Hedge Fund Tracking - 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.

Next up is Pequot Capital Management ran by Art Samberg. Pequot was founded by Art in 1986 with $3 million in assets and peaked with $15 billion in assets around the tech bubble. Today, he manages over $4 billion. They have 150 employees and employ multiple strategies, including private equity and venture capital, as Art believes equity returns will decline over time. Art holds a S.B. from Massachusetts Institute of Technology, an M.S. from Stanford University, and he received his MBA from Columbia University. Pequot Capital Management was recently ranked 93rd in Alpha's hedge fund rankings.

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):
XTO Energy (XTO) Calls
Chesapeake Energy (CHK) Calls
Wells Fargo (WFC)
Microsoft (MSFT)
Ishares emerging markets (EEM)
Exxon Mobil (XOM)
Petrohawk (HK)
Nasdaq (NDAQ)
Bank of NY Mellon (BK)
Union Pacific (UNP)
Lender Processing (LPS)
Moody (MCO)
State Street (STT)
McGraw Hill (MHP)
Mohawk Industries (MHK)
Amgen (AMGN)
Burlington Northern (BNI)
XTO Energy (XTO)
Spdr S&P500 (SPY)
Ishares Russell 2000 (IWM)
JPMorgan Chase (JPM)
NYSE Euronext (NYX)
Intercontinental Exchange (ICE)
Schering Plough (SGP)
Chesapeake Energy (CHK)
St Jude (STJ)
CME Group (CME)
Chipotle (CMG)
Halozyme Therapeutics (HALO)

Some Increased Positions (A few positions they already owned but added shares to)
Spdr Gold Trust (GLD): Increased position by 997%
Ishares Emerging Markets (EEM) Puts: Increased position by 477%
Onyx Pharma (ONXX): Increased position by 179%
Bank of America (BAC): Increased position by 150%
Alexion Pharma (ALXN): Increased position by 100%
Apollo Group (APOL): Increased position by 36%
Cigna Corp (CI) Puts: Increased position by 30%

Some Reduced Positions (Some positions they sold some shares of - note not all sales listed)
Petroleo Brasileiro (PBR): Increased position by 72%
Freeport McMoran (FCX): Increased position by 70%
Qualcomm (QCOM): Increased position by 33%
Occidental Petroleum (OXY): Increased position by 31%
Jack in the Box (JBX): Increased position by 29%
Helmerich & Payne (HP): Increased position by 29%
Southwestern Energy (SWN): Increased position by 23%
Halliburton (HAL): Increased position by 20%
JC Penney (JCP): Increased position by 11%

Removed Positions (Positions they sold out of completely)
Insulet (PODD)
SPDR S&P500 (SPY) Puts
Schering Plough (SGP) Calls
Cree (CREE)
New Oriental Education (EDU)
Companhia Vale (RIO) Calls
Netflix (NFLX) Calls
Elan (ELN) Puts
Burger King (BKC)
Akamai (AKAM) Calls
Spirit Aerosystems (SPR)
Wells Fargo (WFC) Puts
Broadcom (BRCM) Calls
First Solar (FSLR)
Focus Media (FMCN)
Energy Conversion Devices (ENER)
Map Pharma (MAPP)
Career Education(CECO)
Focus Media (FMCN) Calls
Google (GOOG)
Baidu (BIDU) Calls
First Advantage (FADV)
Apple (AAPL) Calls
Juniper Networks (JNPR) Calls
Intuitive Surgical (ISRG) Puts
Research in Motion (RIMM)
Sandisk (SNDK) Calls
Barrick Gold (ABX)
Arcelor Mittal (MT)
Powershares QQQ (QQQQ) Puts

Top 20 Holdings (by % of portfolio)

  1. Ishares Emerging Markets (EEM) Puts: 10.2% of portfolio
  2. Spdr Gold Trust (GLD): 9.9% of portfolio
  3. XTO Energy (XTO) Calls: 6.2% of portfolio
  4. Chesapeake Energy (CHK) Calls: 4.8% of portfolio
  5. Akorn (AKRX): 3.9% of portfolio
  6. Ultra Petroleum (UPL): 2.7% of portfolio
  7. Qualcomm (QCOM) Calls: 2.5% of portfolio
  8. JC Penney (JCP): 2.1% of portfolio
  9. Onyx Pharma (ONXX): 1.9% of portfolio
  10. McDonalds (MCD): 1.8% of portfolio
  11. Southwestern Energy (SWN): 1.8% of portfolio
  12. Wells Fargo (WFC): 1.6% of portfolio
  13. Chipotle Class-B (CMG-B): 1.5% of portfolio
  14. Healthcare Services (HCSG): 1.5% of portfolio
  15. Qualcomm (QCOM): 1.5% of portfolio
  16. Walmart (WMT): 1.5% of portfolio
  17. Microsoft (MSFT): 1.4% of portfolio
  18. Ishares Emerging Markets (EEM): 1.4% of portfolio
  19. Weatherford International (WFT): 1.3% of portfolio
  20. Exxon Mobil (XOM): 1.2% of portfolio

Assets from the collective long US equity, options, and note holdings were $4 billion last quarter and were $3 billion this quarter. Its interesting to see that Pequot started two new Call option positions in XTO and Chesapeake and brought them both up to very large positions, the 3rd and 4th largest fund positions respectively. 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 Samberg, Pequot, & hedge funds:
- Prominent Hedge Fund manager interviews
- Hedge Fund investor letters
- Hedge Fund Rankings
- November hedge fund performance numbers
- October hedge fund performance numbers

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