Mohnish Pabrai's Investment Fund: Latest Portfolio (13F Filing Q1 2010) ~ market folly

Wednesday, May 19, 2010

Mohnish Pabrai's Investment Fund: Latest Portfolio (13F Filing Q1 2010)

(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 filings.)

Next up in our series is Mohnish Pabrai and his Pabrai Investment Fund. He is a value investor in the true sense of the word and has followed in the footsteps of Warren Buffett in numerous ways. Firstly, his fund is structured similarly to Buffett's Partnerships where he charges no management fee and then no incentive fee until the fund gains at least 6%. Once Pabrai clears this hurdle, he charges a 25% incentive fee. Typical hedge funds charge a 2% management fee and a 20% performance incentive. Pabrai has in the past won an auction for lunch with Warren Buffett as well.

For 2009, Pabrai's funds performed well after having a poor 2008. Last year, his PIF2 finished up 122.5%, PIF3 up 125%, and PIF4 up 118.8% as noted in our hedge fund performance numbers post. Pabrai recently presented at the Value Investing Congress and you can read in-depth notes from the event here.

The positions listed below were their long equity, note, and options holdings as of March 31st, 2010 as filed with the SEC. All holdings are common stock unless otherwise denoted:

Brand New Positions
International Coal Group (ICO)

Increased Positions
Fairfax Financial Holdings (FFH): Increased position by 0.34%
Terex (TEX): Increased by 0.02%

Reduced Positions
Teck Resources (TCK): Reduced position by 99.5%
Harvest Natural Resources (HNR): Reduced by 14.74%
Potash (POT): Reduced by 2.03%
Pinnacle Airlines (PNCL): Reduced by 0.25%
Air Transport Services Group (ATSG): Reduced by 0.24%
CapitalSource (CSE): Reduced by 0.18%
Berkshire Hathaway (BRK.B): Reduced by 0.02%

Positions They Sold Out of Completely

Pabrai's Portfolio (by percentage of assets reported on 13F filing)

1. Potash (POT): 11.89%
2. Brookfield Properties (BPO): 10.89%
3. Harvest Natural Resources (HNR): 10.80%
4. Fairfax Financial (FRFHF): 9.28%
5. Berkshire Hathaway (BRK.B): 7.81%
6. Cresud (CRESY): 7.20%
7. Leucadia National (LUK): 5.90%
8. Goldman Sachs (GS): 5.68%
9. Air Transport Group (ATSG): 5.42%
10. Horsehead Holding (ZINC): 4.83%
11. CapitalSource (CSE): 4.72%
12. Pinnacle Airlines (PNCL): 4.48%
13. Terex (TEX): 3.62%
14. Wells Fargo (WFC): 3.50%
15. International Coal Group (ICO): 3.45%
16. Interactive Brokers (IBKR): 0.46%
17. Teck Resources (TCK): 0.07%

As you can see, Pabrai favors many natural resource type plays and has held some of them for quite some time. Potash (POT) is the most notable as it is his largest position. However, he has essentially sold completely out of Teck Resources (TCK), as he only has a tiny part of his position left. Pabrai also started a brand new stake in International Coal Group (ICO). Given that he is a true value investor, you won't see as much turnover in his portfolio to begin with so that wraps up the major moves. For more on Pabrai, head to his recent insight at the Value Investing Congress.

Assets reported on the 13F filing were $332 million this quarter. Data from the SEC is aggregated and sorted automatically by Alphaclone, our source for hedge fund tracking, replicating, and performance backtesting (Market Folly readers can receive a special free 30 day trial). Remember that these filings are not representative of the hedge fund's entire base of AUM.

This post is part of our daily hedge fund portfolio tracking series. We've already detailed activity from numerous managers so click the links below to be taken to the respective portfolio updates: Seth Klarman's Baupost Group, Warren Buffett's Berkshire Hathaway, Stephen Mandel's Lone Pine Capital, and Bill Ackman's Pershing Square, David Einhorn's Greenlight Capital, Eddie Lampert's RBS Partners, and David Tepper's Appaloosa Management. Be sure to check back daily for new hedge fund updates.

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