Eric Mindich's Eton Park Capital 13F Filing Q4 2008 ~ market folly

Wednesday, March 25, 2009

Eric Mindich's Eton Park Capital 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 is Eric Mindich's Eton Park Capital, who was ranked 53rd in Alpha's hedge fund rankings. Mindich received an Economics degree from Harvard and then worked at Goldman Sachs' risk-arbitrage desk. After becoming the youngest partner in the history of Goldman Sachs at the age of 27, it was clear he had a bright future. In 2004, he started his hedge fund Eton Park Capital with a record $3 billion in assets and a $5 million minimum investment required of investors. Today, Mindich manages over $6 billion. Typically, Eton Park invests in long/short equity and convertible arbitrage strategies. Additionally, as much as 30% of the fund can be invested in private investments. In our recent January & February 2009 hedge fund performance numbers post, we saw that Eton Park was up 3% for the month of January. We had also previously noted that Mindich was starting to see opportunity in the markets in an excerpt from an investor letter.

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):
iShares Emerging Markets (EEM) Calls
Citigroup (C)
Viacom (VIA-B)
Google (GOOG)
Zimmer Holdings (ZMH)
Potash (POT) Calls
Constellation Energy (CEG)
Akamai Technologies (AKAM)
General Motors Corp (GRM)
iShares Brazil (EWZ)

Some Increased Positions (A few positions they already owned but added shares to)
Walter Industries (WLT): Increased position by 121.5%
VimpelCom (VIP): Increased position by 95%
Goodyear Tire (GT): Increased position by 55%
Ebay (EBAY): Increased position by 37.5%
Hansen Natural (HANS): Increased position by 26.6%
Verisign (VRSN): Increased position by 25%
Mobile Telesystems (MBT): Increased position by 25%
Gold Fields (GFI): Increased position by 17.2%
Beckman Coulter (BEC): Increased position by 15%
Wells Fargo (WFC): Increased position by 11.6%

Some Reduced Positions (Some positions they sold some shares of - note not all sales listed)
Potash (POT) Puts: Reduced position by 72%
SPDR Gold Trust (GLD) Calls: Reduced position by 70%
Qualcomm (QCOM) Calls: Reduced position by 50%
Calpine (CPN): Reduced position by 32%
iShares Silver (SLV): Reduced position by 32%

Removed Positions (Positions they sold out of completely)
Endeavour International (END)
Verisign (VRSN) Calls
Clear Channel (CCO)
Baringpoint (BE)
Yahoo (YHOO) Puts
Ralcorp (RAH)
TFS Financial (TFSL)
Kinross Gold (KGC)
Motorola (MOT) Calls
Net1 UEPS Tech (UEPS)
Best Buy (BBY) Bonds
Teco Energy (TE)
Goodyear Tire (GT) Calls
Comcast (CMCSA) Calls
Deere (DE) Puts
Vale (RIO) Calls
Kraft (KFT)
Ikon Office (inactive)
UST (UST) Calls
Lorillard (LO) Puts
Alpharma (ALO)
Alpha Natural Resources (ANR)
Barr Pharma (BRL)
Cemex (CX) Puts
Comcast (CMCSK) Calls
Genentech (DNA)
Merrill Lynch (MER)
iShares Emerging Markets (EEM) Puts

Top 20 Holdings (by % of portfolio)

  1. iShares Emerging Markets (EEM) Calls: 9.37% of portfolio
  2. Wells Fargo (WFC) Puts: 8.38% of portfolio
  3. SPDR Gold (GLD) Calls: 7.64% of portfolio
  4. SPDR Gold (GLD): 7.11% of portfolio
  5. Hansen Natural (HANS): 7.1% of portfolio
  6. Verisign (VRSN): 6.6% of portfolio
  7. Qualcomm (QCOM): 5.3% of portfolio
  8. Citigroup (C): 5.1% of portfolio
  9. Viacom (VIA-B): 3.5% of portfolio
  10. Hospira (HSP): 3.4% of portfolio
  11. Goodyear Tire (GT): 3.3% of portfolio
  12. Google (GOOG): 2.6% of portfolio
  13. Zimmer Holdings (ZMH): 2.6% of portfolio
  14. Ebay (EBAY): 2.3% of portfolio
  15. Potash (POT) Calls: 2.2% of portfolio
  16. Comcast (CMCSA): 1.75% of portfolio
  17. Gold Fields (GFI): 1.6% of portfolio
  18. Lorillard (LO): 1.1% of portfolio
  19. Beckman Coulter (BEC): 1.13% of portfolio
  20. Spirit Aerosystems (SPR): 1.1% of portfolio

Well, just like David Einhorn's Greenlight Capital and John Paulson's Paulson & Co, Eric Mindich and his Eton Park team like gold. They have a large position in both GLD and GLD Calls, at the top of their long portfolio. They also own shares of Gold Fields (GFI), a gold producer. When you see a confluence of this many smart minds in the gold trade, you have to take notice. Another portfolio notable is Lorillard (LO), which we've seen pop up in numerous 'Tiger Cub' portfolios. Lastly, we couldn't help but notice the massive put position in WFC. But, given the recent action in financials and the fact that these holdings were as of December 31st, 2008, you have to wonder if they've held onto this position or not. Assets from the collective long US equity, options, and note holdings were $6 billion last quarter and were $3.39 billion this quarter so you can see some evidence of a combination of deleveraging, possible losses, and winding down long equity exposure. This is just one of many funds in our 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, Andreas Halvorsen's Viking Global, Timothy Barakett's Atticus Capital, David Einhorn's Greenlight Capital, Seth Klarman's Baupost Group, Peter Thiel's Clarium Capital, Bret Barakett's Tremblant Capital, David Stemerman's Conatus Capital, James Pallotta's Raptor Capital Management, Lee Ainslie's Maverick Capital, John Griffin's Blue Ridge Capital, Bruce Kovner's Caxton Associates, Paul Tudor Jones' Tudor Investment Corp, Louis Bacon's Moore Capital Management, and Anand Parekh's Alyeska Investment Group. Look for our updates as we will be covering a new fund each day.

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