Hedge Fund Tudor Investment Corp's UK Positions ~ market folly

Monday, October 5, 2009

Hedge Fund Tudor Investment Corp's UK Positions

Hedge Fund Tudor BVI Global Eyes Sustainable Development & Africa

As always, we're continuing our tracking series where we are looking at positions prominent hedge funds hold in UK markets. If you've missed some of our previous posts, make sure you check out the positions of Harbinger Capital Partners, Stephen Mandel's Lone Pine Capital, and Citadel's positions too. If you're unfamiliar with our new series tracking UK positions, check out our preface here. Today, we're covering Paul Tudor Jones' hedge fund Tudor Investment Corp. The positions listed below are taken from their main BVI Global Fund. Keep in mind that tracking Tudor is a bit trickier since they are a global macro fund and can trade all asset classes under the sun. Not to mention, they typically move in and out of positions much faster than the majority of funds we track on the blog in our hedge fund portfolio tracking series. We've already covered one global macro fund's UK positions as we previously examined Louis Bacon's Moore Capital Management. We find it prudent to track global macro funds to see if we can get a glimpse as to what sectors they are flocking to or what macro themes they may be playing. In reviewing Tudor's UK positions, two themes standout: sustainable development and Africa.

symbol date shares % issued equity
Africa Opportunity Fund AOF 10/06/2009 13,750,229 32.3

Tudor bought into the African Opportunity Fund (AOF) through a tender offer held in May of this year. AOF is an interesting fund as its objective is to earn capital growth and income through value, arbitrage, and special situation investments in the continent of Africa. Earlier in the year, the managers were focused on investing in companies with minimal debt and little need to access the capital markets with a particular emphasis on goods and services in short supply in Africa.

The managers, Francis Daniels and Robert Knapp, adopt a deep value approach and sprinkle their annual reports with quotes from Graham and Dodd and Warren Buffett. In June the portfolio was invested: 50% equities, 40% debt equity and 10% cash. The fund pays a dividend yield of 4.8% and in September of this year the fund was trading at a discount to net asset value of approximately -14%. As of June 2009, the two fund managers collectively owned over 23% of the issued stock.

One drawback for potential investors is that AOF is listed on AIM. While it is denominated in US Dollars, it clears through Euronext which will make it hard to trade through many brokers. It’s an offshore fund that is incorporated in the Cayman Islands. One of the portfolio managers, Robert Knapp, is also the managing director of Ironsides which runs a managed account for Millennium Partners, a multi-billion dollar hedge fund based in New York City.

symbol date shares % equity price
Camco International CAO 29/05/2008 23284999 14 na

Taken from Google Finance - Camco International Limited is engaged in identifying and developing greenhouse gas emission reduction projects, and providing carbon and sustainable development consultancy services, including emissions assessment, carbon management and strategy and policy work. The Company is a climate change business in the carbon and sustainable development markets. It offers a range of carbon-related services to public and private organizations worldwide. Among its clients are the World Bank, the European Commission, Land Rover, BP and industrial, power and utilities companies throughout China and Russia. On April 30, 2007, the Company acquired ESD Partners Ltd., the holding company for the Energy for Sustainable Development Group of companies (together ESD), which is engaged in the provision of consulting services in the field of climate change science and technology. On May 10, 2007, it acquired Bradshaw Consulting Limited. In May 2008, the Company acquired ClearWorld Energy Ventures Limited.

Modern Water MWG 12/06/2007 4201681 7.14 119p

01/04/2009 4193181 7.12 32.3p

Modern Water Plc is a United Kingdom-based company. The principal activities of the Company is sourcing, developing and deploying technology-based solutions for fresh water and treatment of wastewater. The Company’s has 53% interest in its subsidiaries include Cymtox Limited. The Company also has 45% interest in joint venture, AguaCure Limited.

Renewable Energy Group REH 05/02/2008 5604333 8.63 na

18/03/2008 6204333 9.5 45p

24/08/2009 6004333 8.7 27p

Taken from Google Finance - Renewable Energy Holdings plc owns and operates the Kesfeld and Kirf windfarms in Germany, and the Bryn Posteg Landfill Gas site in Wales. The Company’s subsidiaries include Seapower Pacific Pty Limited, REH Verwaltung GmbH, Windpark Kesfeld Heckhuscheid GmbH & Co KG, Windpark Kirf GmbH & Co KG, REH Global Limited and Gwynt Cymru Limited. The principal activity of Seapower Pacific Pty Limited is research and development for the purposes of developing technology to capture energy produced by ocean waves to generate electricity and produce, as a by-product, desalinated water. The principal activity of Windpark Kesfeld Heckhuscheid GmbH & Co KG and Windpark Kirf GmbH & Co KG is the ownership and operation of the Company’s windfarms in Germany. The principal activity of Gwynt Cymru Limited is the operation of the Company’s landfill gas site. During 2008, it purchased 49% interest in CETO Development Company Limited. In August 2009, the Company completed the acquisition of Gamar GL.

That wraps up this edition of hedge fund UK position tracking. It was definitely interesting to see the possible themes Tudor might be playing considering their status as one of the premier global macro funds in the world. As of the end of August, Tudor was up 12.5% for the year. To see further performance figures, you can see Tudor's historical returns here. As noted in early August, Tudor was out saying that the recent action in US markets was nothing more than a bear market rally. Now that we've started to see some weakness in the markets, it will be interesting to see if selling intensifies or not. Make sure you check out Paul Tudor Jones in true action as he trades in the scarcely available 1987 PBS Film, "Trader: The Documentary" that we've embedded for readers to watch. For more resources on Tudor Investment Corp, we've covered their US equities portfolio here. And lastly, you can read an excellent compilation of quotes from Paul as well as his hedge fund manager interview.

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