Timothy Barakett's Atticus Capital Hedge Fund 13F Filing: Q4 2008 ~ market folly

Thursday, February 26, 2009

Timothy Barakett's Atticus Capital Hedge Fund 13F Filing: Q4 2008

This is the 4th Quarter 2008 edition of our ongoing hedge fund portfolio tracking series. Before reading this update, make sure you check out the Hedge Fund 13F filings preface.

Next up, we have Atticus Capital, the hedge fund ran by Timothy Barakett. In 2005, Atticus' funds were up a combined 45%. And, they finished well over 30% for 2006. Barakett founded the firm at age 29 in 1995 and focuses on taking large, concentrated positions in companies. One of Atticus' most famous investments was Phelps Dodge, a miner which was bought out by Freeport McMoran (FCX). At one point, Atticus owned more than 9% of Phelps. Barakett received both his BA in Economics and his MBA from Harvard. Its very evident that Barakett employs macro based investment theses. Once he has decided on what the trend is, he will find the best company within that trend and he will place a big bet. And, when needed, he will step in and take an activist role, ensuring the company is performing to his liking. A fun fact about Barakett is that he was a Harvard hockey teammates with Philip Falcone of Harbinger Capital Partners, whom we also cover.

You may have heard about Atticus over the past year simply because their performance has not been up to par, to put it politely. In a September hedge fund performance update, we noted that Atticus European was -42.5% for 2008 back in September while Atticus Global was -27.2% over the same timeframe. And, consequently, Atticus was a victim of liquidation rumors, which were quickly denied. We previously analyzed Atticus' holdings back in June and noticed that they had significant natural resource and mining positions at the time.

The following were their long equity, note, and options holdings as of December 31st, 2008 as filed with the SEC. We have not detailed the changes to every single position in this update, but we have covered all the major moves. All holdings are common stock unless otherwise denoted.

Some New Positions (Brand new positions that they initiated in the last quarter):
Google (GOOG)
Peabody (BTU)
Mastercard (MA) Puts
CME Group (CME) Calls
Wells Fargo (WFC)
Google (GOOG) Puts
CME Group (CME) Puts
CME Group (CME)
Mastercard (MA)
Monsanto (MON)
Burlington Northern (BNI)
Baidu (BIDU)
Visa (V)
Google (GOOG) Calls
Intercontinental Exchange (ICE)
Norfolk Southern (NSC)
Boeing (BA)
Mastercard (MA) Calls
NYSE Euronext (NYX) Puts
Boeing (BA) Puts
NYSE Euronext (NYX) Calls
Ebay (EBAY)
Valero (VLO)
Potash (POT)
Emerging markets index (EEM)
Vale (RIO)
Boeing (VA) Calls

Some Increased Positions (A few positions they already owned but added shares to)
Union Pacific (UNP)
Freeport McMoran (FCX)

Some Reduced Positions (Some positions they sold some shares of - note not all sales listed)
Emisphere (EMIS)

Removed Positions (Positions they sold out of completely)
Financial ETF (XLF) Puts
Synvista (SYI)
Crown Castle (CCI)
Russell 2000 (IWM) Puts
Gold Fields (GFI)
Newmont Mining (NEM)
Occidental Petroleum (OXY)
Western Union (WU)
Telekomunikasi Indonesia (TLK)
KT Corp (KTC)
China Telecom (CHA)
Grupo Aeroportuario Pacifico (PAC)
Grupo Aeroportuario Sureste (ASR)
Sony (SNE)
Petrochina (PTR)

Top 20 Holdings (by % of portfolio)

  1. Google (GOOG) Calls: 10.17% of portfolio
  2. Mastercard (MA) Calls: 6.9% of portfolio
  3. Potash (POT): 6.3% of portfolio
  4. Microsoft (MSFT) Calls: 5.9% of portfolio
  5. Microsoft (MSFT): 5.25% of portfolio
  6. Boeing (BA) Calls: 4.34% of portfolio
  7. NYSE Euronext (NYX): 3.94% of portfolio
  8. Baidu (BIDU): 3.5% of portfolio
  9. Google (GOOG) Puts: 3.13% of portfolio
  10. Intercontinental Exchange (ICE): 2.87% of portfolio
  11. CME Group (CME): 2.79% of portfolio
  12. CSX (CSX) Calls: 2.7% of portfolio
  13. Vale (RIO) Calls: 2.7% of portfolio
  14. Union Pacific (UNP): 2.27% of portfolio
  15. Oracle (ORCL) Calls: 2.25% of portfolio
  16. Emerging Markets Index (EEM): 2.23% of portfolio
  17. Boeing (BA) Puts: 2.17% of portfolio
  18. Mastercard (MA): 2.1% of portfolio
  19. CME Group (CME) Calls: 2.1% of portfolio
  20. CME Group (CME) Puts: 2.1% of portfolio

Atticus returned to many of their 'normal' portfolio holdings this past quarter having sold off a lot of equities amidst the liquidation rumors. Basically, they previously owned a bunch of the names you see in their top 20 holdings. They sold them. Then they bought a lot of them back. Isn't market volatility fun? Assets from the collective long US equity, options, and note holdings were $1.9 billion this quarter, back up from the $500 million they had last time around (which again highlights the massive deleveraging they saw during their little scare). So, things appear to be slowly stabilizing for them. This is just one of many funds in our Q4 2008 hedge fund portfolio tracking series in which we're tracking 35+ prominent funds. We've already covered Paulson & Co (John Paulson), Carl Icahn, Warren Buffett, Stephen Mandel's Lone Pine Capital, George Soros, Bill Ackman's Pershing Square, and Andreas Halvorsen's Viking Global. Look for our updates as we cover a new fund each day.

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