Hedge Fund Eton Park Expands Its UK Holdings ~ market folly

Monday, December 14, 2009

Hedge Fund Eton Park Expands Its UK Holdings

Eric Mindich’s hedge fund Eton Park Capital has recently extended its holdings in the UK market. When we last checked in on their US equities activity, we saw that they had established a large Verisk Analytics position (VRSK) upon its IPO. We now see that they've been active in UK markets and wanted to update their recent maneuvers. Before proceeding you may want to check out our primer on tracking UK positions. Additionally, you can view other hedge funds' UK positions here.

Eton Park was amongst the first hedge funds to build a stake in Cadbury ahead of the announcement by Kraft that it was interested in buying the company. See also our coverage of Paulson & Co's stake in Cadbury.

symbol date shares %
Cadbury CBY 24/09/2009 28570576 2.09

10/12/2009 38815867 2.83

Under Rule 8.3 of the UK Takeover Code, if a fund holds 1% or more of the stock of the offeror or the offeree in a takeover, all dealings (including derivatives) must be disclosed on the day following the date of the transaction. This requirement then continues throughout the offer period. A disclosure table giving details of the companies involved in takeovers in the UK is available on the Takeover Panel's website. Eton Park’s position in Cadbury is made up of 0.37% ordinary shares and 2.43% derivatives (probably equity swaps if we were to venture a guess).

Burford Capital BUR 21/10/2009 7920000 9.9

Eton Park has also recently taken a stake in the new issue Burford Capital. Burford is involved in the legal sector and aims to create and manage a diversified portfolio of commercial dispute financing investments with the aim of providing shareholders with attractive levels of dividends and capital growth. In the short term, the Company intends to focus on commercial disputes in the United States and on international arbitration matters.

Lohnro LONR 10/12/2008 40000000 5.24

09/12/2009 70000000 7.3

Eton Park has also increased its stake in African holding company, Lohnro. Taken from Google finance - Lonrho plc is a pan-African company with a portfolio of investments in infrastructure, transportation, support services and hotels. The Company's infrastructure portfolio of investments include Luba Freeport Limited (Luba) 63% holding and KwikBuild Corporation Limited (KwikBuild) 61.97% holding. Its transportation portfolio includes Lonrho Aviation (BVI) Limited (Lonrho Aviation) 100% holding. Its agriculture sector include Lonrho Agribusiness (BVI) Limited (Lonrho Agriculture) 100% holding. Lonrho's hotel portfolio include Hotel Cardoso SARL 59.04% holding plus management contract and Grand Karavia SARL (Karavia) 50% holding plus management contract and its support services include Sociedade Comercial Bytes & Pieces Limitada (Bytes & Pieces), Lonrho Springs BVI Limited (Lonrho Springs), LonZim Plc (LonZim) and Norse Air Limited.

Daisy Group DAY 20/07/2009 12375000 4.84

10/09/2009 16250000 6.37

28/09/2009 18575000 7.27

10/12/2009 24840000 9.57

Eton Park’s Daisy Group investment is made up of 4.8% ordinary shares and 4.8% equity swaps. Tosca Fund run by Tiger Cub Martin Hughes also holds an 11.28% stake in Daisy Group. Daisy Group PLC, is a newly combined business of Daisy Communications, Freedom4 PLC and Vialtus Solutions. It is a provider of integrated voice and data services to the small-medium business market. Customers have access to a combined product set including access, hosting, voice, managed services and mobile telephony from a single customer service and billing platform. The group operates from its business centres in London and Lancashire.

If you're unfamiliar with Eton Park then here's what you need to know. Eric Mindich started his hedge fund back in 2004 with $3 billion under management with a $5 million minimum investment. Nowadays, Eton Park manages over $6 billion. Their investment strategy centers around Mindich's time at Goldman Sachs where he focused on merger arbitrage. He was quite successful and became the youngest partner in Goldman Sachs' history at the age of 27. In addition to merger arbitrage, Eton Park focuses on long/short equity strategies and even invests up to 30% of their portfolio into private investments. Eton Park's solid track record has landed them in our Market Folly custom portfolio. We created this equity portfolio with Alphaclone and it is seeing over 25% annualized returns since 2000.

That wraps up this update on Eric Mindich's hedge fund Eton Park Capital and their recent UK portfolio additions. For more on Eton Park, check out some more of their portfolio. Lastly, head over to our posts on UK positions to see what other hedge funds are investing in as well.

blog comments powered by Disqus