Brett Barakett's Tremblant Capital Bets Big On Research In Motion (RIMM): 13F Filing ~ market folly

Tuesday, March 2, 2010

Brett Barakett's Tremblant Capital Bets Big On Research In Motion (RIMM): 13F Filing

(This post is part of our series on tracking hedge fund portfolios. If you're unfamiliar with tracking investments they disclose via SEC filings, check out our series preface on hedge fund 13F filings.)

Next up is Brett Barakett's hedge fund Tremblant Capital Group. Before founding his own firm, Brett previously was a portfolio manager for Louis Bacon's global macro hedge fund Moore Capital. 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 name Barakett might ring a bell because his brother Timothy used to run fellow hedge fund Atticus Capital (who previously announced they'd be shutting down). So while Timothy may have stepped away from the hedge fund game, Brett is still going at it. And, in his spare time he enjoys ice hockey.

The positions listed below were their long equity, note, and options holdings as of December 31st, 2009 as filed with the SEC. All holdings are common stock unless otherwise denoted.

Brand New Positions
Mastercard (MA) Calls
Macys (M) Calls
Chipotle Mexican Grill (CMG)
Macys (M)
Liberty Media Starz (LSTZA)
CVS Caremark (CVS)
Citigroup (C)
The rest of their new stakes were less than 0.5% of reported assets each: Apollo Group (APOL) Calls, Lowe Companies (LOW), AGA Medical (AGAM), DirecTV (DTV), Symmetry Medical (SMA), Union Pacific (UNP) Calls, Greatbatch (GB), Liberty Media (LINTA) Calls, America Movil (AMX), Apollo Group (APOL) Puts, Cypress Semiconductor (CY), Gannett (GCI) Calls, & Liz Claiborne (LIZ)

Increased Positions
Research in Motion (RIMM) Calls: Increased by 312%
Procter & Gamble (PG) Calls: Increased by 107%
Charles Schwab (SCHW): Increased by 37.9%
Hologic (HOLX): Increased by 20.5%
Green Mountain Coffee Roasters (GMCR): Increased by 13.6%
Integra Lifesciences (IART): Increased by 13%

Reduced Positions
Walmart (WMT): Reduced by 33%
Visa (V): Reduced by 32%
Apple (AAPL): Reduced by 26%
Mastercard (MA): Reduced by 25%
Procter & Gamble (PF): Reduced by 20%
Redhat (RHT): Reduced by 11.3%

Removed Positions (Sold out completely):
Qualcomm (QCOM) Calls
Chipotle (CMG-B)
DirecTV (DTV) Calls
Redhat (RHT) Calls
Liberty Media (LMDIA)
CBS (CBS) Puts
Viacom (VIA-B) Puts
Palm (PALM) Puts
The rest of their sold positions were less than 0.5% of assets reported on previous filings each: iShares HongKong (EWH) Puts, Intuitive Surgical (ISRG) Calls, iShares FTSE (FXI) Puts, Werner (WERN) Calls, Baidu (BIDU) Puts, Lamar Advertising (LAMR) Calls, Corporate Executive Board (EXBD) Calls, Burlington Northern (BNI), Peet Coffee (PEET), & China Biotics (CHBT)

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

  1. Research in Motion (RIMM) Calls: 28%
  2. Procter & Gamble (PG) Calls: 8.37%
  3. Procter & Gamble (PG): 3.34%
  4. Visa (V): 2.15%
  5. Mastercard (MA): 2.13%
  6. Mastercard (MA) Puts: 2.09%
  7. Research in Motion (RIMM): 1.98%
  8. Mastercard (MA) Calls: 1.97%
  9. Green Mountain Coffee Roasters (GMCR): 1.91%
  10. Hologic (HOLX): 1.91%
  11. Macys (M) Calls: 1.86%
  12. Baidu (BIDU): 1.67%
  13. Walmart (WMT): 1.65%
  14. Apple (AAPL): 1.64%
  15. Charles Schwab (SCHW): 1.63%

Tremblant Capital uses options to express a lot of their positions so keep in mind that this can get tricky when trying to assess their net exposure to a specific stock. For instance, they own Mastercard (MA) common stock, but also own both calls and puts on the name. Since we don't know the strike prices or expiration dates, it's nearly impossible for us to know what their overall bet is on the name. At the same time though, we know they are bullish on Research in Motion (RIMM) because they own both the common stock and and calls. Not to mention, they added massively to their call position over the past quarter.

In terms of other additions, they doubled their stake in Procter & Gamble (PG) calls and started new call positions in both Macys and Mastercard. Of the positions they completely sold out of, Qualcomm was notable because it had previously been a sizable stake for Barakett's hedge fund. Overall though, their portfolio looks pretty similar to last quarter and they've certainly retained (and even expanded) their large exposure to Research in Motion.

There are also a few transactions we need to clarify. In regards to their Chipotle positions, you'll notice they "sold out" of Chipotle's B shares and added a 'new' stake in Chipotle's A shares. In actuality, Chipotle converted into a single shareclass of common stock in the fourth quarter. As such, Tremblant owns the regular CMG shares. In addition, Barakett's hedge fund 'sold out' of LMDIA and started 'new' stakes in DTV and LSTZA. In reality, this was just a result of a merger transaction.

Assets reported on the 13F filing were $3.8 billion this quarter compared to $3.0 billion last quarter, an increase of 28% in exposure to equities and options. Remember that these filings are not representative of the hedge fund's entire base of AUM.

We'll be tracking 40+ prominent funds in our fourth quarter 2009 hedge fund portfolio tracking series. We've already covered Seth Klarman's Baupost Group, Mohnish Pabrai's Investment Fund, Carl Icahn's hedge fund Icahn Partners, David Einhorn's Greenlight Capital, Stephen Mandel's Lone Pine Capital, John Griffin's Blue Ridge Capital, David Tepper's Appaloosa Management, Warren Buffett's portfolio, John Paulson's hedge fund Paulson & Co, Lee Ainslie's Maverick Capital, Dan Loeb's Third Point, Eddie Lampert's RBS Partners, David Ott's Viking Global, and Chris Shumway's hedge fund Shumway Capital Partners, Chase Coleman's Tiger Global, Philip Falcone's Harbinger Capital Partners, Roberto Mignone's Bridger Management, Thomas Steyer's Farallon Capital, and John Burbank's Passport Capital. Check back daily for our new updates.

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