Jeffrey Gendell's Tontine Associates Files Amended 13D on Neenah Enterprises (NENA) ~ market folly

Friday, March 20, 2009

Jeffrey Gendell's Tontine Associates Files Amended 13D on Neenah Enterprises (NENA)

Hedge fund Tontine Associates has filed an amended 13D with the SEC and has disclosed a 65.3% ownership stake on Neenah Enterprises (NENA). Tontine shows an aggregate amount of shares beneficially owned of 9,550,697 due to activity on March 18th, 2009.

Jeffrey Gendell's hedge fund firm has been quite busy over the past year, and in particular over the past few months. As two of his hedge funds have closed down, his portfolio has been shuffled around all over the place. (Some of their recent changes can be seen here). As we've detailed before, Tontine has recently sold out of 15 positions, as well as filed amended 13D's to many of their holdings, and then they most recently sold out of 9 more positions.

If you're unfamiliar with Tontine, they specialize in macro investing and take very large, concentrated positions in companies he feels will benefit from those macro themes. Additionally, he will take on an activist role when necessary, to ensure shareholder returns. The fund has posted returns in excess of 100% in both 2003 and 2005. Conversely, this year has been the year from hell for Tontine. Recently, they announced they would be closing two of their hedge funds: Tontine Capital LP and Tontine Capital Partners LP. Two of Tontine's funds will remain open: Tontine-25 and Tontine Financial.

It has definitely been an astonishing year for Gendell, whose Tontine firm is named after an annuity invented by Lorenzo de Tonti. In such an annuity, investors contribute and collect dividends. As investors each die off, their share is left to the remaining partners. Therefore, the last man alive receives all the money. Gendell's desire is clearly to be that 'last investor' remaining. Such a goal becomes slightly ironic when you consider his firm suffered monumental losses and almost 'died' this past year.

For more on top hedge funds, check out our portfolio tracking series where we're in the middle of tracking a different fund's Q4 holdings each day.

Taken from Google Finance,

Neenah Enterprises, Inc. is "a foundry company in the United States and is a supplier of casting to the heavy municipal market. The Company sells these municipal castings throughout the United States to state and local government entities, utility companies, precast concrete manhole structure producers, and contractors for both new construction and infrastructure replacement."

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