Louis Bacon's Hedge Fund Moore Capital Adds To Insurance Plays ~ market folly

Thursday, January 21, 2010

Louis Bacon's Hedge Fund Moore Capital Adds To Insurance Plays

We're back with an update in our hedge fund UK holdings series and this time we're focusing on Louis Bacon's hedge fund firm Moore Capital Management. A few days ago, the London Stock Exchange announced that Moore Capital Management held 22,750,000 shares in Insurance Broker Brightside Group (LSE: BRT), or 5.5% of the company's outstanding equity. This is a brand new position for Moore. Recently, we also saw that Moore increased its holding in another UK listed insurance operator. In December 2009, Louis Bacon's hedge fund firm increased their holdings in Lancashire Holdings (LSE: LRE) from a 4% to a 5% ownership stake. They now own 8,604,520 shares. We've previously covered the rest of Moore's UK positions as well.

This past year, Moore Capital's global fund was up 20.6% as noted in our 2009 hedge fund performance numbers post. Louis Bacon comes from the legendary Commodities Corp and is one of their 'offspring' along with Paul Tudor Jones and Bruce Kovner. Moore Capital is a $10 billion global macro set of hedge funds bearing Bacon's middle name. He is a well-known trader and more importantly, a risk manager.

Bacon actually got his firm started with help from Paul Tudor Jones. When Jones stopped accepting capital for his hedge fund, he turned investors to Bacon's firm. In the past, we had seen figures that Bacon had returned 30% annually since inception in 1990. He is notable because his returns often have low volatility and a low correlation to the stock market. In Barron's 2009 hedge fund rankings, Moore came in at #33 out of 100.

Bacon learned his risk management skills at an early age in the futures markets. Whlie getting his MBA at Columbia, he used his student loan money to trade and lost it all. Clearly, he learned a lesson he would never forget. Such a large mistake has made him an impeccable risk manager. After starting his own firm, he returned 86% in his first year. He likes to identify long-term macro trends and will trade around the position in the short-term. We'll continue to pass along portfolio developments as they surface. In the mean time, you can view the rest of Moore's UK positions here.

Taken From Google Finance - "Brightside Group plc, through its subsidiaries, provides insurance broking, the provision of premium finance, the provision of medical reports, lead generation and the provision of debt management solutions. The Company operates in four segments: insurance broking; finance provider; medical reporting; and lead generation and debt management. Some of the Company's subsidiaries include Brightside Holdings Limited, David & Co. Consultants Limited, Aust Holdings Limited, Minibus Direct Limited, Group Direct Broking Limited, E Group Limited and Commercial Vehicle Direct Insurance Services Limited."

blog comments powered by Disqus