Baupost Group (Seth Klarman) Portfolio Update: 13D & 13G Filings ~ market folly

Wednesday, January 21, 2009

Baupost Group (Seth Klarman) Portfolio Update: 13D & 13G Filings

Baupost Group, the hedge fund ran by Seth Klarman, has filed an amended 13D with the SEC and has disclosed a 30.21% ownership stake in RHI Entertainment (RHIE). The 13D was amended on December 1st, 2008 and then again on January 16th, 2009. They have increased their position in RHIE to 4,078,332 shares after purchasing an additional 416,633 shares on January 14th for $4.25. Previously, they owned 3,480,299 shares as of their last 13F filing (which shows positions as of September 30th, 2008).

Baupost Group has also filed an amended 13G with the SEC and has disclosed a 15.39% ownership stake in Theravance (THRX). The 13G was filed due to their activity on November 30th, 2008. They have increased their position in THRX to 8,071,841 shares. They previously had owned 6,269,891 shares back on September 30th, 2008.

Additionally, they filed an amended 13G on Acusphere (ACUS) and disclosed a 0% ownership stake. This was due to activity on December 31st, 2008 and so they have completely sold out of their position. They previously had held 2,600,582 shares.

Lastly, they also filed a 13G on Facet Biotech (FACT), disclosing an 11.6% ownership stake. This was due to activity on December 31st, 2008. They now own 2,772,092 shares after previously not showing it in their portfolio. You can view the rest of Baupost Group's portfolio holdings here.

Over the past 25 years, Baupost has seen an annual compound return of 20% and is ranked 49th in Alpha's hedge fund rankings. Klarman has always considered himself a value investor and has been patient through the market turmoil. The past few years they have had nearly half their $14 billion in assets in cash. But, with turmoil comes opportunity. And, as such, Baupost's cash has been gradually deployed by Klarman and Baupost's 100 employees, leaving them with around a fourth of assets left in cash. Klarman's investment process is detailed in his book Margin of Safety. In it, he lays out a "how-to" on risk-averse value investing. The book is no longer actively printed and is very hard to find. His take on recent market action can be viewed in his recent interview with Harvard Business School. For more information about Klarman, check out our post on hedge fund manager interviews.

Taken from Google Finance,

RHI Entertainment, Inc. "develops, produces and distributes new made-for-television movies, mini-series and other television programming worldwide. The Company also selectively produces new episodic series programming for television. In addition to its development, production and distribution of new content, RHI Payment systems Ltd owns a library of existing long-form television content, which it licenses primarily to broadcast and cable networks worldwide."

Theravance is a "biopharmaceutical company with a pipeline of internally discovered product candidates. The Company is focused on the discovery, development and commercialization of small molecule medicines across a number of therapeutic areas, including respiratory disease, bacterial infections and gastrointestinal motility dysfunction."

Acusphere is "a specialty pharmaceutical company that develops drugs and formulations of existing drugs using its porous microparticle technology."

Taken from their company website, Facet Biotech is a "small but sophisticated biotechnology company. Combining our expertise in antibody engineering with a disciplined, biology-driven research approach, our company is dedicated to advancing our current pipeline of four clinical-stage products and leveraging our research and development capabilities to identify and develop new drugs."

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