Peter Thiel's Clarium Capital 13F Filing: Q4 2008 ~ market folly

Wednesday, March 4, 2009

Peter Thiel's Clarium 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 Clarium Capital Management, LLC ran by Peter Thiel, the co-founder of PayPal. Clarium is a $2 billion global macro hedge fund that currently has the majority of its holdings in the debt and currency markets. Keep in mind that the equity portion of their portfolio has always been minimal, so the stocks below only represent a small sliver of their overall holdings. 2008 was a roller coaster year for Thiel and company, to say the least. Earlier in 2008, they were up over 45%. But, with a mistimed move into equities, they began to give back their gains and found themselves -4.5% for 2008 as we noted in our year end post of hedge fund performance numbers. The bulk of the losses were sustained in October, where they were down 18% for the month. Assets under management had recently ballooned to the highest amount in Clarium's history, but that didn't last long as redemption requests rolled in and markets continued to tank.

Thiel's fund is unique in that it employs a slightly different management fee structure than most of the hedge fund world. Typical funds charge a flat 2% management fee on assets and then a 20% performance fee. Clarium, on the other hand, does not charge a management fee, but charges only a 25% performance fee. They obviously have more incentive to perform well, to ensure they get paid. And, 2008 didn't go too well in that regard. Thiel recently sat down and opined on numerous macro topics, including whether the US is the next Japan. And, to those who want a little more background on Thiel & his investment style, we first wrote about him here. Clarium has started off 2009 on a positive note, finishing the month of January up 6.7%, as we noted in our latest Clarium update. We'll have to see if they give back the gains like they did in 2008; hopefully they've learned from their mistakes.

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):
S&P 500 (SPY)
Walgreen (WAG)
Intel (INTC)
Playboy (PLA)
Teradata (TDC)
NCR Corp (NCR)
Meadow Valley (MVCO)
National Coal (NCOC)

Some Increased Positions (A few positions they already owned but added shares to)
American Express (AXP): Increased position by 1020%
T3 Energy (TTES): Increased position by 318%
Altria (MO): Increased position by 106%
NRG Energy (NRG): Increased position by 75%

Some Reduced Positions (Some positions they sold some shares of - note not all sales listed)
Burlington Northern (BNI): Reduced position by 95%
Hewlett Packard (HPQ): Reduced position by 91%
Exxon Mobil (XOM): Reduced position by 90%
Procter & Gamble (PG): Reduced position by 85%
Philip Moriss International (PM): Reduced position by 84%
Interval Leisure (IILG): Reduced position by 83%
Microsoft (MSFT): Reduced position by 79%
Mastercard (MA): Reduced position by 73%
Schering Plough (SGP): Reduced position by 39%

Removed Positions (Positions they sold out of completely)
Pimco Municipal fund (PMF)
Wendys (WEN)
Nvidia (NVDA)
Oracle (ORCL)
Pimco Floating Rate fund (PFN)
Mylan (MYL)
Iron Mountain (IRM)
Consolidated Edison (ED)
Kimberly Clark (KMB)
Natus Medical (BABY)
Colgate Palmolive (CL)
Walmart (WMT)
Chevron (CVX)
Johnson & Johnson (JNJ)
CVS Caremark (CVS)
Ishares Municipal Bond fund (MUB)
Lazard (LAZ)
United States Oil Fund (USO)
Ishares Brazil (EWZ)
Canadian Superior Energy (SNG)
SPDR Gold Trust (GLD)
Occidental Petroleum (OXY)
Fairfax Financial (FFH)
Conoco Phillips (COP)
US Natural Gas fund (UNG)
McDonald's (MCD)
Google (GOOG)
Yahoo (YHOO)
Select Sector Financial (XLF)

Top 20 Holdings (by % of portfolio)

  1. S&P 500 (SPY): 21.35% of portfolio
  2. American Express (AXP): 16.38% of portfolio
  3. Walgreen (WAG): 11.67% of portfolio
  4. Altria Group (MO): 8.55% of portfolio
  5. NRG Energy (NRG): 5.15% of portfolio
  6. Microsoft (MSFT): 4.9% of portfolio
  7. Procter & Gamble (PG): 3.9% of portfolio
  8. Philip Morris International (PM): 3.43% of portfolio
  9. Schering Plough (SGP): 3.29% of portfolio
  10. Mastercard (MA): 3.16% of portfolio
  11. Hewlett Packard (HPQ): 2.86% of portfolio
  12. Alabama Aircraft (AAII): 2.2% of portfolio
  13. Diageo (DEO): 1.8% of portfolio
  14. Intel (INTC): 1.4% of portfolio
  15. Playboy (PLA): 1.28% of portfolio
  16. Exxon Mobil (XOM): 1.23% of portfolio
  17. T3 Energy (TTES): 1.17% of portfolio
  18. Teradata (TDC): 1.17% of portfolio
  19. Burlington Northern (BNI): 0.96% of portfolio
  20. MFA Mortgage (MFA): 0.93% of portfolio

Clarium's assets listed in the filing decreased, undoubtedly because of their move away from equities and into other asset classes. They completed sold out of some of their massive holdings from last quarter: GOOG, YHOO, & XLF. This isn't the first time that Thiel has had only a tiny sliver of his portfolio in equities. Assets from the collective long US equity, options, and note holdings were $2.8 billion last quarter and were $31 million this quarter. 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, and Seth Klarman's Baupost Group. Look for our updates as we will be covering a new fund each day.

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