Brett Barakett's Tremblant Capital: Large Research in Motion (RIMM) Exposure ~ market folly

Wednesday, December 23, 2009

Brett Barakett's Tremblant Capital: Large Research in Motion (RIMM) Exposure

This is the third quarter 2009 edition of our hedge fund portfolio tracking series. If you're unfamiliar with tracking hedge fund movements or SEC filings, check out our series preface on hedge fund 13F filings.

Next up in our series is Brett Barakett's hedge fund Tremblant Capital. The name Barakett might ring a bell because his brother Timothy used to run fellow hedge fund Atticus Capital (who recently announced they'd be shutting down). So while Timothy may have stepped away from the hedge fund game, Brett is still going at it. Before founding his own firm, Brett was previously a portfolio manager for Louis Bacon's hedge fund Moore Capital and in his spare time he enjoys ice hockey. Taken from their site, Tremblant Capital Group's objective is "to achieve superior risk adjust returns for our investors through our focused and disciplined investment process." The only major notable portfolio activity out of Tremblant has been their 13G filing on IMAX.

Keep in mind that the positions listed below were Tremblant's long equity, note, and options holdings as of September 30th, 2009 as filed with the SEC. We don't cover every single portfolio maneuver, as we instead focus on all the big moves. All holdings are common stock unless otherwise denoted.

Some New Positions
Brand new positions that they initiated last quarter:

Qualcomm (QCOM) Calls
Procter and Gamble (PG) Calls
Wynn Resorts (WYNN) Puts
Union Pacific (UNP) Puts
Monsanto (MON)
DirecTV (DTV) Calls
Apollo Group (APOL)
Viacom (VIA-B) Puts

Some Increased Positions
Positions they already owned but added shares to:
Imax Corp (IMAX): Increased position by 187.7% (we previously detailed this)
Mastercard (MA) Puts: Increased by 115.2%
Melco Crown (MPEL) Calls: Increased by 45.9%
Green Mountain Coffee Roasters (GMCR): Increased by 42%
Walmart (WMT): Increased by 38.5%
Cheesecake Factory (CAKE): Increased by 36%
Intel (INTC) Puts: Increased by 34%
Liberty Media (LINTA): Increased by 27.3%
Charles Schwab (SCHW): Increased by 24.6%

Some Reduced Positions
Stakes they sold shares in but still own:
Red Hat (RHT) Calls: Reduced by 70.2%
Apple (AAPL) Puts: Reduced by 63.7%
RedHat (RHT): Reduced by 45.7%
Google (GOOG): Reduced by 43.5%
Melco Crown (MPEL): Reduced by 35.7%
Icon (ICLR): Reduced by 35.7%
Eclipsys (ECLP): Reduced by 31.7%
Hologic (HOLX): Reduced by 29.8%
Baidu (BIDU): Reduced by 26.8%
Costco (COST): Reduced by 24.8%
Apple (AAPL): Reduced by 24.4%
Qualcomm (QCOM): Reduced by 22.2%

Removed Positions
Positions they sold out of completely:
Apple (AAPL) Calls
Amazon (AMZN) Puts
Qualcomm (QCOM) Puts
Canadian Natural Resources (CNQ)
AU Optronics (AUO) Puts
Hologic (HOLX) Puts
Catalyst Health (CHSI)
Research in Motion (RIMM) Puts
Symantec (SYMC)
Bankrate (RATE)
Weingarten Realty (WRI)
MGM Mirage (MGM) Calls
Las Vegas Sands (LVS) Calls
MEMC Electronics (WFR)
Wynn Resorts (WYNN) Calls
Gannett (GCI) Calls
Harley Davidson (HOG) Calls
Commscope (CTV)
Sequenom (SQNM)

Top 15 Holdings by percentage of assets reported on 13F filing

  1. Research in Motion (RIMM) Calls: 8.7%
  2. Qualcomm (QCOM) Calls: 5.43%
  3. Procter and Gamble (PG): 5.08%
  4. Procter and Gamble (PG) Calls: 4.94%
  5. Visa (V): 3.21%
  6. Walmart (WMT): 2.9%
  7. Mastercard (MA): 2.87%
  8. Research in Motion (RIMM): 2.7%
  9. Apple (AAPL): 2.5%
  10. Hologic (HOLX): 2.29%
  11. Baidu (BIDU): 2.19%
  12. Mastercard (MA) Puts: 2.12%
  13. Melco Crown (MPEL): 2.08%
  14. Visa (V) Calls: 1.97%
  15. Green Mountain Coffee Roasters (GMCR): 1.95%

Tremblant was out reducing technology exposure across the board as it was previously almost 49% of their long US equity holdings. While they were moving out of that sector, they were moving into consumer goods as around 18% of their longs are in that sector now. The tough thing to decipher about their portfolio is their net position in a given name. As you can see above, they hold a bevy of puts and calls in addition to the underlying common in many stocks. As such, we do not have access to the strike prices or expirations of those options so it's hard to tell if they are net bullish or net bearish on some of their positions.

By far and away their largest position though is calls in Research in Motion (RIMM) and this carries over from the second quarter where it was their largest stake then as well. Their second largest holding is a brand new position in Qualcomm (QCOM) calls which is notable. So while they were reducing tech exposure, don't get us wrong... they definitely still have tech positions.

Below are some graphical illustrations of the changes made to Tremblant Capital's portfolio courtesy of Drew Robertson at Financial Research Station:

(click to enlarge)

(click to enlarge)

Assets from the collective holdings reported to the SEC via 13F filing were $3 billion this quarter compared to $2.7 billion last quarter. Please keep in mind that when we state "percentage of portfolio," we are referring to the percentage of assets reported on the 13F filing. Since these filings only report longs (and not shorts or cash positions), the percentages are skewed. Also, please again note that these positions were as of September 30th so two months have elapsed and they've undoubtedly shifted around their portfolio since then.

This is just one of the 40+ prominent funds that we'll be covering in our Q3 2009 hedge fund portfolio series. We've already covered Seth Klarman's Baupost Group Bill Ackman's Pershing Square, Stephen Mandel's Lone Pine Capital, Dan Loeb's Third Point LLC, David Einhorn's Greenlight Capital, John Paulson's firm Paulson & Co, Lee Ainslie's Maverick Capital, Andreas Halvorsen's Viking Global, and Chase Coleman's Tiger Global. Check back daily as we'll be covering new hedge fund portfolios.

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