Hedge Fund Baupost Group: New Enzon Pharmaceutical Stake (ENZN) ~ market folly

Tuesday, November 10, 2009

Hedge Fund Baupost Group: New Enzon Pharmaceutical Stake (ENZN)

Seth Klarman's well known hedge fund Baupost Group recently filed two separate 13G's with the SEC in which they updated positions. Firstly, we see that Baupost Group has initiated a brand new position. In a 13G filed due to activity on October 31st, 2009, we see that they have disclosed a 13.7% ownership stake in Enzon Pharmaceuticals (ENZN) with 6,228,130 shares. When we covered Baupost's portfolio via their 13F filing that summarized their positions as of June 30th, Enzon was not present. As such, they have started a new position in this name over the past four months. Interestingly enough, Enzon also recently announced they have agreed to sell their specialty pharma unit for $327 million.

Secondly, we also see that Baupost has disclosed a 14.72% ownership stake in Viastat (VSAT) with 4,652,631 shares. The filing was made due to activity on October 31st, 2009 and they have increased their position by over 278% as they previously held 1,229,057 shares back on June 30th of this year. So, in the past four months or so, Klarman has added 3,423,574 additional shares. Stay tuned next week as we'll be covering the new wave of portfolio disclosures hedge funds will be filing with the SEC (form 13F). This will be our first in-depth look at portfolios since June 30th, and we'll get a better feel as to what these funds have been up to. In the mean time, check out our coverage of Baupost's recent activity where we detailed their other portfolio moves as well as their sale of PDL Biopharma.

We track Baupost Group for their 20% annual compounded return and solid investing methodologies. They are one of the select few funds we have included in our Market Folly custom portfolio that is seeing over 20% annualized returns by combining 3 hedge fund portfolios into a cohesive whole. Head over to Alphaclone to see the hedge fund portfolio replication in action and to see which positions our portfolio is currently invested in (and will soon re-balance to). And if you want to learn how to invest like Seth Klarman, then we'd highly recommend picking up his very hard to find book, Margin of Safety where he provides a "how-to" on risk averse value investing.

Taken from Google Finance, "Enzon Pharmaceuticals, Inc. (Enzon) is a biopharmaceutical company focused on developing, manufacturing and commercializing of medicines for patients with cancer and other life-threatening conditions. The Company has a portfolio of four marketed products: Oncaspar, DepoCyt, Abelcet and Adagen. Enzon’s drug development programs utilize several approaches, including its PEGylation technology platform and the Locked Nucleic Acid (LNA) technology. The PEGylation technology was used to develop two of the Company’s products, Oncaspar and Adagen, and has created a royalty revenue stream from licensing partnerships for other products developed using the technology. The Company also engages in contract manufacturing for several pharmaceutical companies. The Company operates in three segments: Products, Royalties and Contract Manufacturing."

"ViaSat, Inc. is a producer of satellite and other wireless communications and networking systems to government and commercial customers. The Company is organized principally in three segments: government systems, commercial networks and satellite services. The Company’s government systems business is focused on network-centric government communications, where it develops and produces systems and specialized equipment for government customers for tactical data links, unmanned aerial vehicles, secure networking, signal processing and generation, and satellite communications applications. In its commercial networks segment, the Company develops and produces systems and products for consumer, enterprise and mobile (aviation and maritime) broadband customers. Its satellite services segment provides managed network satellite services to enterprise and mobile broadband customers."

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