Roberto Mignone's Hedge Fund Bridger Management Added Tons Of Long Exposure In Q3 ~ market folly

Wednesday, January 6, 2010

Roberto Mignone's Hedge Fund Bridger Management Added Tons Of Long Exposure In Q3

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.

This is the first time we've covered Bridger Management in our 13F analysis series. Bridger Management is the hedge fund firm founded by Roberto Mignone in 2000. They currently have around $4 billion in assets under management and run a long/short equity and event driven strategy focused on intensive fundamental research. Before Bridger, Mignone co-founded Blue Ridge Capital with John Griffin in 1996. And before that, Mignone (like Griffin) worked at Julian Robertson's Tiger Management and as such joins the ranks of other prominent 'Tiger Cub' hedge funds. Mignone received his degree from Harvard and his MBA from Harvard Business School. Our only previous coverage of Bridger includes their position in Cardiome Pharma (CRME).

Keep in mind that the positions listed below were Bridger'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:

Berkshire Hathaway (BRK.A)
Waste Connections (WCN)
Carmax (KMX)
Apple (AAPL)
Exxon Mobil (XOM)
International Game Technology (IGT)
Royal Caribbean (RCL)
Intel (INTC)
Invesco (IVZ)
Amgen (AMGN)
Microsoft (MSFT)
Immucor (BLUD)
Copart (CPRT)
Boston Scientific (BSX)
Pall (PLL)
Continental Airlines (CAL)
Ebay (EBAY)
Republic Services (RSG)
Watson Pharmaceuticals (WPI)
Biogen Idec (BIIB)
Penn National Gaming (PENN)
Cablevision (CVC)
US Airways (LCC)
Cardinal Health (CAH)
Monsanto (MON)
Pennymac Mortgage (PMT) ~ This is interesting because fellow hedge fund Blue Ridge Capital (Mignone's former fund) also has a position.
Las Vegas Sands (LVS)

Some Increased Positions
Positions they already owned but added shares to:
UnitedHealth (UNH): Increased position by 419.6%
Bally Technologies (BYI): Increased by 322.2%
Millipore (MIL): Increased by 158.7%
OSI Pharmaceuticals (OSIP): Increased by 100%
Hertz Global (HTZ): Increased by 77.7%
First America (FAF): Increased by 64.7%
Davita (DVA): Increased by 30%

Some Reduced Positions
Stakes they sold shares in but still own:
Schering Plough (SGP): Reduced position by 58.2%
Life Technologies (LIFE): Reduced by 32.3%
MGM Mirage (MGM): Reduced by 27.6%

Removed Positions
Positions they sold out of completely:
Zimmer Holdings (ZMH)
Sysco (SYY)
Staples (SPLS)
Bank of America (BAC)
Transocean (RIG)
Conoco Phillips (COP)
Cisco Systems (CSCO)
Plains Exploration (PXP)
Arch Coal (ACI)
Host Hotels (HST)
Liveperson (LPSN)
Waters (WAT)
Olin (OLN)
Tyson Foods (TSN)

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

  1. Covidien (COV): 3.81%
  2. Millipore (MIL): 3.25%
  3. Expedia (EXPE): 3.04%
  4. Dr Pepper Snapple (DPS): 2.94%
  5. Ameriprise Financial (AMP): 2.59%
  6. Wyeth (WYE): 2.53%
  7. Berkshire Hathaway (BRK.A): 2.31%
  8. First America Corp (FAF): 2.16%
  9. Waste Connections (WCN): 2.05%
  10. Carmax (KMX): 1.99%
  11. Apple (AAPL): 1.99%
  12. Ritchie Bros Auction (RBA): 1.97%
  13. Exxon Mobil (XOM): 1.96%
  14. Avis Budget (CAR): 1.91%
  15. International Game Technology (IGT): 1.84%

Hedge fund Bridger Management was out adding a ton of brand new positions in the third quarter. After all, their assets invested in long US equities increased by almost $1 billion. Literally six of their top 15 holdings were brand new stakes including Berkshire Hathaway, Waste Connections, Carmax, Apple, Exxon Mobil, and International Game Technology. This fits directly with the theme we've seen of hedge funds being very long equities.

Bridger also added heavily to existing positions in UnitedHealth, Bally Technologies, and Millipore. We want to single out Millipore because Mignone's old firm, Blue Ridge Capital also has held a position in MIL for quite some time. It's interesting to see the portfolio overlap between Bridger and Blue Ridge, as well as other funds. Of all the Tiger Cub hedge funds, we'd venture to say that Bridger has one of the more individualistic portfolios in terms of top holdings. Don't get us wrong, they still share similar positions with other Tiger Cub hedge funds, but unlike those funds, Bridger does not hold them as top positions. Check out Blue Ridge's portfolio to see the similarities and differences. In terms of names Mignone's hedge fund sold completely out of, Zimmer Holdings, Sysco, Staples, and Bank of America no longer grace their portfolio and had previously been sizable positions.

Below you'll find graphical representations of the recent shifts in Bridger Management's portfolio courtesy of Drew Robertson at Financial Research Station:

(click to enlarge)

(click to enlarge)

Overall, they increased stakes in services and technology. Assets from the collective holdings reported to the SEC via 13F filing were $2.1 billion this quarter compared to $1.15 billion last quarter, so they almost doubled their long US equity exposure on a quarter over quarter basis. 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, Chase Coleman's Tiger Global, Brett Barakett's Tremblant Capital, John Griffin's Blue Ridge Capital and Shumway Capital Partners (Chris Shumway), Thomas Steyer's Farallon Capital, David Stemerman's Conatus Capital, and Matt Iorio's White Elm Capital. Check back daily as we'll be covering new hedge fund portfolios.

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