Lee Ainslie's Maverick Capital Sells CVS Caremark (CVS) In Favor Of Walgreens (WAG): 13F Filing Q1 2009

This is the 1st Quarter 2009 edition of our ongoing hedge fund portfolio tracking series. Before reading this update, make sure you check out the Hedge Fund 13F filings series preface.

Next up, we have Maverick Capital. Lee Ainslie started Maverick Capital back in 1993 with $38 million. Nowadays, the fund is worth over $5 billion. Ainslie, like many of the other fund managers we've profiled, has a background rooted in learning from legendary great Julian Robertson at Tiger Management. Just yesterday we ran a profile on Robertson and took a deeper look at his current big investment. These proteges (nicknamed 'Tiger Cubs') learned from the best and have had great success running their own funds. Some of the other Tiger Cubs include Stephen Mandel's Lone Pine Capital, John Griffin's Blue Ridge Capital, and Andreas Halvorsen's Viking Global.

Maverick's strategy is straight up stock picking, both long and short. While they focus on both the long and short sides of the book, they do not employ pairs trades. Maverick places a large emphasis on a team atmosphere and focuses on risk management. Instead of having one or two people making all the investment decisions, Maverick has six industry sector heads. The industry heads of the consumer, health care, cyclical, retail, financial, and technology sectors all report to Ainslie. While Ainslie still has the ultimate say, he considers them peers and values the team culture at Maverick. In an interview in the past, Ainslie has said "I spend the majority of my day talking to them because they know so much more about each of their stocks than I could ever hope to. We're all peers." Each team typically has around 7 analysts.

They are a long/short hedge fund in the true sense of the definition. Maverick uses a value approach (obviously learned from Julian) and one of their most popular metrics is finding companies and comparing their enterprise value to sustainable free cash flow. 2008 was a rough year for them (and many other funds) as their Maverick Fund finished -26.2% for the year, as noted in our year-end hedge fund performance numbers post. Some of their notable past activity includes selling out of their entire Under Armour (UA) position via a 13G filing, as well as filing a 13G on Cardiovascular Systems (CSII).

For more background on Ainslie and Maverick, check out the profile/biography on them that we posted this morning.

The following were Maverick's long equity, note, and options holdings as of March 31st, 2009 as filed with the SEC. We have not detailed the changes to every single position in this update, but we have covered all the major moves. All holdings are common stock unless otherwise denoted.


Some New Positions (Brand new positions that they initiated in the last quarter):
Walgreens (WAG)
Best Buy (BBY)
KLA-Tencor (KLAC)
Progressive (PGR)
Wellpoint (WLP)
Strayer Education (STRA)
Mastercard (MA)
Sears Holdings (SHLD)
Pepsico (PEP)
Davita (DVA)
Visa (V)
AmerisourceBergen (ABC)
PNC Financial Services (PNC)
Advanced Micro Devices (AMD) Bonds
Parker Hannifin (PH)
Green Mountain Coffee Roasters (GMCR)
Liberty Media (LCAPA)
Electronic Arts (ERTS)
Time Warner Cable (TWC)
Orthofix International (OFIX)
OptionsXpress (OXPS)
Air Methods (AIRM)
Bankrate (RATE)
Time Warner (TWX)


Some Increased Positions (A few positions they already owned but added shares to)
Netapp (NTAP): Increased by 190%
First Solar (FSLR): Increased by 90%
Lorillard (LO): Increased by 80%
HanesBrands (HBI): Increased by 61%
Cognizant Tech (CTSH): Increased by 57%
Resarch in Motion (RIMM): Increased by 40%
RenaissanceRe (RNR): Increased by 35%
Wyeth (WYE): Increased by 30%


Some Reduced Positions (Some positions they sold some shares of - note not all sales listed)
Priceline (PCLN): Reduced by 37%
Fidelity National (FIS): Reduced by 29%
Pfizer (PFE): Reduced by 27%
JPMorgan Chase (JPM): Reduced by 25%
Gilead Sciences (GILD): Reduced by 24%
Lender Processing (LPS): Reduced by 20%
Qualcomm (QCOM): Reduced by 20%


Removed Positions (Positions they sold out of completely)
CVS Caremark (CVS)
Staples (SPLS)
Baxter (BAX)
Carnival (CCL)
Covidien (COV)
Devry (DV)
Macys (M)
Genentech (DNA)
Dicks Sporting Goods (DKS)
State Street (STT)
Textron (TXT)
Health Net (HNT)
Interval Leisure (IILG)
Universal American (UAM)


Top 15 Holdings (by % of portfolio)

1. Walgreens (WAG): 4.33% of portfolio
2. Lorillard (LO): 3.63% of portfolio
3. Apple (AAPL): 3.34% of portfolio
4. Research in Motion (RIMM): 3.28% of portfolio
5. First Solar (FSLR): 3.26% of portfolio
6. Raytheon (RTN): 3.1% of portfolio
7. Wyeth (WYE): 3.08% of portfolio
8. Cognizant Technology (CTSH): 3.06% of portfolio
9. Qualcomm (QCOM): 2.93% of portfolio
10. Liberty Media (LMDIA): 2.83% of portfolio
11. Best Buy (BBY): 2.73% of portfolio
12. Amgen (AMGN): 2.7% of portfolio
13. Marvell Technology (MRVL): 2.59% of portfolio
14. Apollo Group (APOL): 2.56% of portfolio
15. Netapp (NTAP): 2.19% of portfolio

Maverick started a brand new position in Walgreen's (WAG) and brought it all the way up to their top holding. Additionally, they sold completely out of their CVS Caremark (CVS) position (which had previously been their #1 holding the quarter prior). So, it looks like they've straight up swapped CVS in favor of WAG. That is by far and away their biggest move of the last quarter. Their brand new addition of Best Buy (BBY) was noted as well.

Regarding positions they already owned, Maverick significantly bumped up two of their holdings. They added significantly to their Lorillard (LO) and First Solar (FSLR) plays, as those two stand as their 2nd and 5th largest positions respectively. We also noticed their large purchase of Netapp (NTAP) shares, but even after the purchases, that position is still only their 15th largest holding.

Maverick's portfolio also definitely showcases their 'Tiger Cub' roots. They hold numerous Tiger favorite names such as Apollo Group, Wyeth, Apple, Lorillard, and Strayer Education. What's interesting when you track the Tiger Cubs is the slight divergences you begin to see amongst managers. While all of them are rooted in the same principles of investing they employed in their time at Tiger, they have all added their own twist and personal touch to the strategy. As such, you now see Maverick still holding Lorillard (LO) as their 2nd largest position. While, on the other hand, we recently saw Lone Pine completely sell out of their LO position. Conversely, a while ago John Griffin's Blue Ridge Capital had sold out completely out of Tiger Cub favorite name America Movil (AMX) when Lone Pine continued to add to their position. These divergences between the Tiger Cubs have become very intriguing to us and it almost becomes 'who do you want to follow now?' when they split opinions. In the end, it appears that Maverick still has conviction behind their LO play.

Assets from the collective holdings reported to the SEC via 13F filing were $5.5 billion this quarter compared to $4.8 billion last quarter. So, they definitely put some money to work on the long side of the portfolio over the first quarter of 2009. Maverick is just one of the 40+ prominent funds that we'll be covering in our hedge fund Q1 2009 portfolio series. Check back each day as we cover new fund portfolios. We've already covered Andreas Halvorsen's Viking Global, John Paulson's hedge fund Paulson & Co, Stephen Mandel's Lone Pine Capital, Eric Mindich's Eton Park Capital, John Griffin's Blue Ridge Capital, and David Einhorn's Greenlight Capital, Seth Klarman's Baupost Group, and Timothy Barakett's Atticus Capital.

Maverick Capital Makes Silly Calculation Error

In a recently further amended 13G filing with the SEC, hedge fund Maverick Capital has updated their position in CSII. In a very silly mistake, Maverick has noted in the amended filing that they "inadvertently reported a miscalculation of the percentage" (of shares beneficially owned by the reporting persons). In the initial amended 13G filing, Maverick had a 16.2% stake in the company, which is a miscalculation. Now, as you below, they are listed as owning 15.3%.

So, their shares owned amount remains the same, but the percentage ownership stake (as calculated by them) has been adjusted to correct their error. Maverick now shows a 15.3% stake in Cardiovascular Systems (CSII) with 2,228,441 aggregate amount beneficially owned. This just goes to show that while many hedge funds have some very talented minds, everyone makes mistakes and is human.

This was a new position for them as of March 10th, as they did not own it when we covered their portfolio prior to that. Again, please note, Maverick has not altered the amount of shares they own. They are simply amending the filing to correct their calculation error.

If you're unfamiliar with Maverick, here's their background: Lee Ainslie started Maverick Capital back in 1993 with $38 million. Nowadays, the fund is worth $4 billion. Ainslie, like many of the other fund managers we've profiled, has a background rooted in learning from legendary great Julian Robertson at Tiger Management. These proteges (nicknamed 'Tiger Cubs') learned from the best and have had great success running their own funds. Some of the other Tiger Cubs include Stephen Mandel's Lone Pine Capital and Andreas Halvorsen's Viking Global. Maverick's strategy is straight up stock picking, both long and short. While they focus on both the long and short sides of the book, they do not employ pairs trades.

They try to hedge their positions like the true definition of a hedge fund. Maverick uses a value approach (obviously learned from Julian) and one of their most popular metrics is finding companies and comparing their enterprise value to sustainable free cash flow. Their Maverick Fund finished -26.2% for 2008, as noted in our year-end hedge fund performance numbers post.

Taken from Google Finance,

Cardiovascular Systems is "a biopharmaceutical company focused on discovering, developing, in-licensing and commercializing anti-infective products. The Company had been developing its product candidate REP3123, an investigational narrow-spectrum antibacterial agent for the treatment of Clostridium difficile (C. difficile) bacteria and C. difficile infection and its other anti-infective programs based on its bacterial deoxyribonucleic acid (DNA) replication inhibition technology."

Lee Ainslie's Maverick Capital Files 13G on Cardiovascular Systems (CSII)

In a recent 13G filing with the SEC, hedge fund Maverick Capital has disclosed a 16.2% stake in Cardiovascular Systems (CSII) with 2,228,441 aggregate amount beneficially owned. This is a new position for them, as they did not own it when we covered their portfolio just last week.

If you're unfamiliar with Maverick, here's their background: Lee Ainslie started Maverick Capital back in 1993 with $38 million. Nowadays, the fund is worth $4 billion. Ainslie, like many of the other fund managers we've profiled, has a background rooted in learning from legendary great Julian Robertson at Tiger Management. These proteges (nicknamed 'Tiger Cubs') learned from the best and have had great success running their own funds. Some of the other Tiger Cubs include Stephen Mandel's Lone Pine Capital and Andreas Halvorsen's Viking Global. Maverick's strategy is straight up stock picking, both long and short. While they focus on both the long and short sides of the book, they do not employ pairs trades.

They try to hedge their positions like the true definition of a hedge fund. Maverick uses a value approach (obviously learned from Julian) and one of their most popular metrics is finding companies and comparing their enterprise value to sustainable free cash flow. Their Maverick Fund finished -26.2% for 2008, as noted in our year-end hedge fund performance numbers post.

Taken from Google Finance,

Cardiovascular Systems is "a biopharmaceutical company focused on discovering, developing, in-licensing and commercializing anti-infective products. The Company had been developing its product candidate REP3123, an investigational narrow-spectrum antibacterial agent for the treatment of Clostridium difficile (C. difficile) bacteria and C. difficile infection and its other anti-infective programs based on its bacterial deoxyribonucleic acid (DNA) replication inhibition technology."

Lee Ainslie's Maverick Capital 13F Filing: Q4 2008

This is the 4th Quarter 2008 edition of our ongoing hedge fund portfolio tracking series. Before reading this update, make sure you check out the Hedge Fund 13F filings preface.

Next up, we have Maverick Capital. Lee Ainslie started Maverick Capital back in 1993 with $38 million. Nowadays, the fund is worth $4 billion. Ainslie, like many of the other fund managers we've profiled, has a background rooted in learning from legendary great Julian Robertson at Tiger Management. These proteges (nicknamed 'Tiger Cubs') learned from the best and have had great success running their own funds. Some of the other Tiger Cubs include Stephen Mandel's Lone Pine Capital and Andreas Halvorsen's Viking Global. Maverick's strategy is straight up stock picking, both long and short. While they focus on both the long and short sides of the book, they do not employ pairs trades.

They try to hedge their positions like the true definition of a hedge fund. Maverick uses a value approach (obviously learned from Julian) and one of their most popular metrics is finding companies and comparing their enterprise value to sustainable free cash flow. Their Maverick Fund finished -26.2% for 2008, as noted in our year-end hedge fund performance numbers post. Some of their notable past activity includes selling out of their entire Under Armour (UA) position via a 13G filing.

The following were their long equity, note, and options holdings as of December 31st, 2008 as filed with the SEC. We have not detailed the changes to every single position in this update, but we have covered all the major moves. All holdings are common stock unless otherwise denoted.


Some New Positions (Brand new positions that they initiated in the last quarter):
Qualcomm (QCOM)
Staples (SPLS)
Carnival (CCL)
Pfizer (PFE)
JPMorgan Chase (JPM)
Eaton (ETN)
Biogen Idec (BIIB)
Macys (M)
Genentech (DNA)
Cummins (CMI)
Renaissance Holdings (RNR)
Discovery Communications (DISCA)
Discovery Communications (DISCK)
State Street (STT)
American Tower (AMT)
Xenoport (XNPT)
Chico Fas (CHS)
The Finish Line (FINL)
Petroquest (PQ)
Gymboree (GYMB)
Healthnet (HNT)
Interval Leisure (IILG)


Some Increased Positions (A few positions they already owned but added shares to)
DirecTV (DTV): Increased position by 92.6%
Berkshire Hathaway (BRK-A): Increased position by 73%
XTO Energy (XTO): Increased position by 36%
Cognizant (CTSH): Increased position by 33.9%
Fidelity Information (FIS): Increased position by 18.8%


Some Reduced Positions (Some positions they sold some shares of - note not all sales listed)
Netapp (NTAP): Reduced position by 77.8%
Apollo Group (APOL): Reduced position by 64.2%
ThermoFisher Scientific (TMO): Reduced position by 64%
Lorillard (LO): Reduced position by 61%
Citrix (CTXS): Reduced position by 53.6%
First Solar (FSLR): Reduced position by 51.5%
Gilead (GILD): Reduced position by 46.5%
America Movil (AMX): Reduced position by 40.7%
Marvell (MRVL): Reduced position by 38%
Priceline (PCLN): Reduced position by 37.7%
Dicks Sporting Goods (DKS): Reduced position by 37.5%
Baxter (BAX): Reduced position by 31%
Infinera (INFN): Reduced position by 30%
DeVry (DV): Reduced position by 28.9%
Amgen (AMGN): Reduced position by 28.6%
Apple (AAPL): Reduced position by 25.96%
Berkshire Hathaway (BRK-B): Reduced position by 35.5%
Research in Motion (RIMM): Reduced position by 21.3%
Raytheon (RTN): Reduced position by 19.6%


Removed Positions (Positions they sold out of completely)
First Marblehead (FMD)
Comscore (SCOR)
Salesforce (CRM)
Hudson City Bancorp (HCBK)
JCrew (JCG)
VMWare (VMW)
Las Vegas Sands (LVS)
Leap Wireless (LEAP)
Freeport McMoran (FCX)
Lamar Advertising (LAMR)
Goldman Sachs (GS)
Yingli Green Energy (YGE)
M&T (MTB)
Digital River (DRIV)
Potash (POT)
Cardinal Health (CAH)
Morgan Stanley (MS)
BB&T (BBT)
MetroPCS (PCS)
UnderArmour (UA)
Resmed (RMD)
Dish Network (DISH)
Western Union (WU)
Marsh & McLennan (MMC)
Schering Plough (SGP)
Burlington Northern (BNI)
Activision (ATVI)
Cigna (CI)
Monsanto (MON)
Advanced Micro Devices (AMD)


Top 20 Holdings (by % of portfolio)

1. CVS Caremark (CVS): 4.25% of the portfolio
2. Raytheon (RTN): 4.17% of the portfolio
3. Qualcomm (QCOM): 3.85% of the portfolio
4. Amgen (AMGN): 3.7% of the portfolio
5. Apple (AAPL): 3.37% of the portfolio
6. XTO Energy (XTO): 3.13% of the portfolio
7. Gilead Sciences (GILD): 2.84% of the portfolio
8. Staples (SPLS): 2.56% of the portfolio
9. Research in Motion (RIMM): 2.5% of the portfolio
10. Apollo Group (APOL): 2.5% of the portfolio
11. Baxter International (BAX): 2.4% of the portfolio
12. Marvell Technology (MRVL): 2.4% of the portfolio
13. Fidelity Information (FIS): 2.4% of the portfolio
14. Liberty Media (LMDIA): 2.37% of the portfolio
15. DirecTV (DTV): 2.35% of the portfolio
16. Wyeth (WYE): 2.34% of the portfolio
17. Carnival (CCL): 2.25% of the portfolio
18. America Movil (AMX): 2.21% of the portfolio
19. Berkshire Hathaway (BRK-A): 2.11% of the portfolio
20. Priceline (PCLN): 2.1% of the portfolio

Right from the start we notice common holdings with that of other Tiger Cub hedge funds. Apollo Group, America Movil, Qualcomm, and Carnival are all favorites of these various funds. And, its no surprise really, as they all come from the same school of thought. And, undoubtedly, they all stay in touch. Its also worth noting that they started new positions in some names and brought them up in size to the top 20 holdings. Some of these include Carnival, Qualcomm, and Staples. Other than that, they were doing a lot of selling across the board. Assets from the collective long US equity, options, and note holdings were $8.2 billion last quarter and were down to $4.8 billion this quarter. This is just one of many funds in our hedge fund portfolio tracking series in which we're tracking 35+ prominent funds. We've already covered Paulson & Co (John Paulson), Carl Icahn, Warren Buffett, Stephen Mandel's Lone Pine Capital, George Soros, Bill Ackman's Pershing Square, Andreas Halvorsen's Viking Global, Timothy Barakett's Atticus Capital, David Einhorn's Greenlight Capital, Seth Klarman's Baupost Group, Peter Thiel's Clarium Capital, Bret Barakett's Tremblant Capital, David Stemerman's Conatus Capital, and James Pallotta's Raptor Capital Management. Look for our updates as we will be covering a new fund each day.

Hedge Fund Tracking: Lee Ainslie's Maverick Capital - 13F Filing 3rd Quarter 2008

(Note: Before reading this update, make sure you check out the preface to the series we're doing on Hedge Fund 13F's here).

This is the 3rd Quarter 2008 edition of our ongoing hedge fund tracking series. We've already covered Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bill Ackman's Pershing Square, and Stephen Mandel's Lone Pine Capital. Next up, we have Maverick Capital. Lee Ainslie started Maverick Capital back in 1993 with $38 million. Nowadays, the fund is worth $10 billion. Ainslie, like many of the other fund managers we've profiled, has a background rooted in learning from legendary great Julian Robertson at Tiger Management. These proteges (nicknamd 'Tiger Cubs') learned from the best and have had great success running their own funds. Some contacts over at Maverick have explained that their strategy is straight up stock picking, both long and short. They made it clear though, that they do not employ pairs trades. Although, some of their long/short setups might be in the same sector.

They try to hedge their positions like the name hedge fund implies by picking out the shining stars in certain sectors, as well as identifying the pieces of garbage. Now, of course, this presents us with a problem in that the 13F filings only show long positions (unless they're holding puts on a name, we can see those). So, a good amount of Maverick's portfolio (the entire short side) is unbeknownst to us, because they have reported zero put positions. But, let's look on the bright side in that we can see all their long positions. Maverick uses a value approach (obviously learned from Julian) and one of their most popular metrics is finding companies and comparing their enterprise value to sustainable free cash flow.

As we noted in our October hedge fund performance numbers update, one of Maverick's funds was -6.34% in October and is now -26.47% year-to-date. (You can check out their most recent investor letter). We suggest checking out Maverick's 2nd quarter '08 portfolio holdings so you can get a sense as to how they were shifting around their portfolio recently. Also, we recently noted that Maverick recently sold out of their entire Under Armour (UA) position via a 13G filing.

So, now that we've got a background on Ainslie and Maverick, let's take a quick look at his portfolio highlights. We'd like to give a special thank you to Alex Prywes who has helped us with the 13f analysis so that we can cover more funds.

The following were Maverick's long equity and options holdings as of September 30th, 2008 as filed with the SEC.

New Positions (Brand new positions that Maverick initiated in the last quarter):
Apollo Group (APOL)
Amgen (AMGN)
Priceline (PCLN)
XTO Energy (XTO)
Activision Blizzard (ATVI)
Schering Plough (SGP)
Devry (DV)
HanesBrands (HBI)
Lender Processing (LPS)
BB&T (BBT)
Morgan Stanley (MS)
M&T Bank (MTB)
Yingli Green Energy (YGE)
Goldman Sachs (GS)
Freeport McMoran (FCX)
Las Vegas Sands (LVS)
J Crew (JCG)
Hudson City Bancorp (HCBK)
SalesForce (CRM)
Zale Corp (ZLC)
Nutrisystem (NTRI)
Sealy (ZZ)
Fortress Investment Group (FIG)
Hancock Holding Co (HBHC)
Bancorp Southern (BCSO)
Washing Mutual (WM)
Susquehanna Bancshares (SUSQ)


Added to (Positions Maverick already owned but added more shares)
Citizens Republic Bancorp (CRBC): Increased position by 293%
Berkshire Hathaway (BRK.B): Increased position by 112%
MSCI Inc (MXB): Increased position by 87%
Southern Financial Group (AFN): Increased position by 80%
Universal American Corp (UAM): Increased position by 58.5%
Marvell (MRVL): Increased position by 45%
Cigna (CI): Increased position by 43%
Netapp (NTAP): Increased position by 35%
Cognizant Tech (CTSH): Increased position by 33%
GMarket (GMKT): Increased position by 27%
First Solar (FSLR): Increased position by 22%
Lorillard (LO): Increased position by 21%
Dish Network (DISH): Increased position by 20%
MetroPCS (PCS): Increased position by 19%
CVS Caremark (CVS): Increased position by 14%
AthenaHealth (ATHN): Increased position by 12.7%
Leap Wireless (LEAP): Increased position by 12%
Textron (TXT): Increased position by 9.9%
Monsanto (MON): Increased position by 7%
Digital River (DRIV): Increased position by 4.6%
Thermo Fisher Scientific (TMO): Increased position by 3.8%
Gilead Sciences (GILD): Increased position by 1.3%
Berkshire Hathaway (BRK.A): Increased position by 0.16%
Cypress Biosciences (CYPB): Increased position by 0.05%


Reduced Positions (Positions Maverick sold some shares of)
Cardinal Health (CAH): Reduced by 55%
Covidien (COV): Reduced by 54%
Western Union (WU): Reduced by 51%
National City (NCC): Reduced by 51%
Marsh & Mclennan (MMC): Reduced by 44.7%
Potash (POT): Reduced by 44%
Baxter (BAX): Reduced by 36%
Burlington Northern (BNI): Reduced by 35%
Advanced Micro Devices (AMD): Reduced by 34%
America Movil (AMX): Reduced by 29%
Under Armour (UA): Reduced by 29% - Note: They have since sold off their entire position
DirecTV (DTV): Reduced by 28%
Dicks Sporting Goods (DKS): Reduced by 25%
Trubion Pharmaceuticals (TRBN): Reduced by 22%
Infinera (INFN): Reduced by 9.7%
Wyeth (WYE): Reduced by 9.6%
Home Inns & Hotels (HMIN): Reduced by 9.4%
Resmed (RMD): Reduced by 9%
Palm (PALM): Reduced by 7.8%
Citrix (CTXS): Reduced by 7.2%
Liberty Media (LMDIA): Reduced by 5.6%
Apple (AAPL): Reduced by 4.8%
Raytheon (RTN): Reduced by 3%
Fidelity National Info (FIS): Reduced by 2.9%
Comscore (SCOR): Reduced by 2.7%
Research in Motion (RIMM): Reduced by 2.2%


Positions with no change
Lamar Advertising (LAMR)
VMWare (VMW)
Newstar Financial (NEWS)
BPW Acquisition (BPW)
First Advantage Corp (FADV)
Bluefly (BFLY)
First Marblehead (FMHD)
Ultra Clean Holdings (UCTT)
Vivus Inc (VVUS)


Removed Positions (Positions Maverick sold out of completely)
American Capital Strategies (ACAS)
Amylin Pharma (AMLN)
Avon Products (AVP)
Bank of New York Mellon (BK)
China Nepstar (NPD)
Corcept Therapeutics (CORT)
Discovery Holdings (DISCA)
Forest Labs (FRX)
Gamestop (GME)
Genentech (DNA)
Google (GOOG)
Hansen Natural (HANS)
ITT Educational (ESI)
JP Morgan Chase (JPM)
Lexmark (LXK)
Lumber Liquidators (LL)
Macys (M)
Mylan (MYL)
Nordstrom (JWN)
Polo Ralph Lauren (RL)
Sohu (SOHU)
Suntrust Banks (STI)
Viacom (VIA)
Visa (V)
Zimmer Holdings (ZMH)


Top 20 Holdings (by % of portfolio)

1. Lorillard (LO): 3.98% of portfolio
2. Apple (AAPL): 3.58% of portfolio
3. First Solar (FSLR): 3.38% of portfolio
4. America Movil (AMX): 3.29% of portfolio
5. Raytheon (RTN): 3.22% of portfolio
6. Marvell (MRVL): 3.2% of portfolio
7. Apollo Group (APOL): 3.19% of portfolio
8. Research in Motion (RIMM): 3.16% of portfolio
9. Amgen (AMGN): 3.15% of portfolio
10. Gilead (GILD): 2.8% of portfolio
11. Netapp (NTAP): 2.79% of portfolio
12. CVS Caremark (CVS): 2.76% of portfolio
13. Baxter (BAX): 2.54% of portfolio
14. Citrix (CTXS): 2.38% of portfolio
15. Thermo Fisher Scientific (TMO): 2.33% of portfolio
16. Advanced Micro Devices (AMD): 2.3% of portfolio
17. Liberty Media (LMDIA): 2.09% of portfolio
18. Monsanto (MON): 1.9% of portfolio
19. Priceline (PCLN): 1.85% of portfolio
20. XTO Energy (XTO): 1.79% of portfolio

This is the fifth hedge fund we've covered in our 3rd quarter 2008 edition of our hedge fund tracking series in which we're tracking 35+ prominent funds. We've already covered Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bill Ackman's Pershing Square, and Stephen Mandel's Lone Pine Capital. Stay tuned this week and next week as we detail the portfolio holdings of more funds. Overall, its been one of the worst years ever for hedge funds, as we noted in our recent October hedge fund performance update. Thus, the recent moves they've made in their portfolios become all the more interesting given the way the market has played out. Here are some funds to look forward to that we will be tracking: David Einhorn's Greenlight Capital, Paul Tudor Jones' Tudor Investment Corp, Louis Bacon's Moore Capital Management, and many, many more.

More on Ainslie & Maverick:
- October Hedge Fund Performance numbers
- Maverick's recent Investor Letter
- Maverick's 2nd quarter '08 portfolio holdings & 13f analysis
- Ainslie's Maverick Capital sells entire Under Armour (UA) stake
- 'Tiger Cub' hedge fund panel
- Julian Robertson (Ainslie's mentor) reveals some recent buys

Lee Ainslie's Maverick Capital Sells Entire Under Armour (UA) Stake - 13G Filing

In a 13G filing made with the SEC after the close today, hedge fund Maverick Capital has sold off their entire position in Under Armour (UA).  Maverick Capital is a $10 billion hedge fund ran by the notoriously great stock picker Lee Ainslie.  The filing shows that the transactions were completed as of October 31st, 2008.  Previously, Maverick owned 3,629,460 shares, around a 10% stake in the company, as was detailed in their last 13F filing.

Maverick's performance this year has definitely been sub-par by their standards.  Their Maverick Fund was -6.34% for October and is now -26.47% year-to-date.  You can check out their most recent investor letter here and learn more about Maverick and their portfolio holdings here.  Their updated portfolio will soon be available with the release of the next 13F filing with the SEC here in the next week or two.  So, make sure you keep an eye out at MarketFolly.com for that.  It will be interesting to see what else Maverick has been busy doing besides dumping all of their UA.

Taken from Google Finance, Under Armour (UA) is "engaged in the design, development, marketing and distribution of branded performance products for men, women and youth. The Company designs and sells an offering of apparel and accessories that utilize a variety of synthetic microfiber fabrications. Its active wear and sports apparel, footwear and accessories are designed to wick perspiration away from the skin, help regulate body temperature, enhance comfort and mobility and improve performance regardless of weather condition."

Affluential Hedge Funds Suffer in September

Oh how the mighty have stumbled. In a market where everyone is feeling the heat, even the well-respected, historical top performers are now finding it rough out there. We recently got some performance updates from numerous iconic hedge funds and found out that September was not kind to them. Let's take a look at some of the information.

• Moore Capital Management, a group of global macro hedge funds ran by notable risk manager Louis Bacon has seen three of its funds 'stumble' in the recent weeks, coming in -5% in September. You can view Moore Capital's equity portfolio holdings here.
• Maverick Capital, a $10 billion hedge fund ran by Lee Ainslie was -19.5% in the month of September alone and is now -21.2% year-to-date. As you can see, they were actually holding up pretty well all year until September hit them hard. Oh how one month can change things. Maverick's levered fund was -35.5% for the month of September. You can check out Maverick's most recent portfolio holdings here.
• Third Point Offshore, a fund ran by notable activist Daniel Loeb's Third Point LLC was -11% for the month of September and is now -18.4% for the year. You can check out some of Third Point's most recent holdings here.
• Paul Tudor Jones' Raptor Fund (Tudor Investment Corp) was -2% in the month of September and is now -12% year-to-date. Although Tudor employs a global macro strategy, the Raptor Fund is their equities fund. The Raptor Fund is currently run by James Pallotta; but, as I wrote about earlier, Pallotta is leaving Tudor to start his own equities fund. And, you can view Tudor Investment Corp's most recent equity holdings here.
• Greenlight Capital, the hedge fund run by David Einhorn, was -12.8% in September and is -16.4% for the year. You can check out some of Einhorn's portfolio holdings here.
• Lone Pine Capital, another 'tiger cub' fund managed by Stephen Mandel saw its Lone Cyprus fund -14.7% in September. That fund is -26.5% for the year. You can check out Lone Pine's recent activity here and portfolio holdings here.
• Timothy Barakett's Atticus Capital woes continue. His Atticus European Fund was -15.8% percent in September and his Atticus Global Fund -2.8% in September. Atticus European is now -42.5% for the year and Atticus Global is -27.2% for the year. You can view Atticus' most recent SEC filings disclosing their portfolio holdings here.
• Jeffrey Gendell's Tontine Partners wer -59.30% in September and are now -66.7% for the year... unreal. Here are Tontine's most recent portfolio holdings.
• Bret Barakett, brother of Atticus' Timothy Barakett, is also feeling the pain. His Tremblant Capital was -19.3% for the month of September and is -28% for the year. You can check out Tremblant's recent activity here and their portfolio holdings here.
• Shumway Capital's levered fund was -16% for September, and their Ocean fund was -8.6% for the month and is now -9% year-to-date. (Yet another case of one month doing extreme damage to a fund).
  
• Chris Coleman's Tiger Global was -14.3% for September and is now -13.7% for the year.
• Stephen Cohen's SAC Capital Multi-strat fund was -10.7% for September.
• Farallon Capital Management was -10.5% for the month of September.
• David Stemerman's Conatus Capital was -10.4% for September and is -8.10% year-to-date. Stemerman recently left Lone Pine Capital (referenced above) to start his own fund, which I wrote about here.
• Jana Partners was -9% for September and is -14.7% for the year
• Andreas Halvorsen's Viking Global, who I will be profiling next week, was -7.9% for September and is 0.30% for the year. (Wow, a fund that is actually still UP on the year).
• Bill Ackman's Pershing Square was 0.10% for the month of September and finds himself 1.9% for the year. (Another fund actually UP on the year).
• Ken Griffin has been hit hard as well. Citadel Capital's flagship fund was -15% for September and -18% for the year. The fund has lost around $2 billion.
  

So, don't feel so bad if your portfolio is underwater because even those regarded as 'some of the best in the game' are finding this market troublesome. No one is invincible in this environment.

Well, almost no one. John Paulson certainly could argue that he is invincible. Paulson runs Paulson & Co and is famous for making a fortune by betting against sub-prime when this whole mess began to unfold. And, it appears as if Paulson is still up to his fortune-making ways. One of his funds has generated a 589% return, which could easily be up there amongst the largest returns by a single hedge fund in a year. Paulson's Advantage Plus fund has returned 19.44% year-to-date as of the end of August. This is the same fund that gained 158% the year prior and has grown to almost $9 billion. And, that's not all. Paulson has multiple funds performing well in this environment. Taken from DealJournal,

"Paulson’s Advantage fund was up 13.22% for the year to the end of August, having made 100.15% last year. Its Credit Opportunities fund was up 12.95%, having made 351.72% last year; its Credit Opportunities fund was up 12.46%, having made 589.62% last year; its Enhanced fund was up 8.17%, having made 116.48% last year; and its International fund was up 5.17%, having made 51.7% last year. Paulson turned a $500m investment in its Credit Opportunities fund into $3.5bn over the course of last year, considered by investment consultants and investors the largest dollar amount ever generated by a hedge fund in a year."

After making a fortune by betting against sub-prime, Paulson has turned his focus to shorting UK banks. Paulson is on quite a roll and we'll keep an eye on his performance over the next year and see if he can hit a home run three years running.

Overall though, this has been the worst year for hedge funds in quite some time. As evidenced above, even some of the historically brightest managers in the game are stumbling a bit. And, undoubtedly, such struggles will lead to investor redemptions and continued deleveraging.


For more information and background on some of the iconic hedge funds mentioned above, head over to my posts on hedge fund manager interviews and Alpha's hedge fund rankings.




Sources: Anonymous investors in various funds, NYT , Bloomberg, FT, & WSJ DealJournal

Hedge Fund Tracking: Maverick Capital's 13F (Lee Ainslie)

(Note: Before reading this update, make sure you check out the preface to the series I'm doing on Hedge Fund 13F's here).

Here we are with another week of the Hedge Fund tracking series. If you've missed them, I've already covered Jeffrey Gendell's Tontine Partners here, Bret Barakett's Tremblant Capital here, Peter Thiel's Clarium Capital here, Stephen Mandel's Lone Pine Capital here, and John Griffin's Blue Ridge Capital here. Next up, we have Lee Ainslie's Maverick Capital. Lee Ainslie started Maverick Capital back in 1993 with $38 million. Nowadays, the fund is worth $10 billion. Ainslie, like many of the other fund managers I've profiled, has a background rooted in learning from legendary great Julian Robertson at Tiger Management. So, due to the fact that these proteges learned from the best and have had great success running their own funds, I continually try to find a reason not to follow these funds. And, needless to say I'm never successful. Some contacts over at Maverick have explained that their strategy is straight up stock picking, both long and short. They made it clear though, that they do not employ pairs trades. Although, some of their long/short setups might be in the same sector. They try to hedge their positions like a true hedge fund by picking out the shining stars in certain sectors, as well as identifying the pieces of garbage. Now, of course, this presents us with a problem in that the 13F filings only show long positions (unless they're holding puts on a name, we can see those). So, a good amount of Maverick's portfolio (the entire short side) is unbeknownst to us, because they have reported zero put positions. But, let's look on the bright side in that we can see all their long positions. Maverick uses a value approach (obviously learned from Julian) and one of their most popular metrics is finding companies and comparing their enterprise value to sustainable free cash flow.

So, now that we've got a little background on Maverick, let's see what they were up to. Once again, I'd like to give thanks to Alex Prywes for helping me gather and sort through the data of numerous hedge funds (including the one below). Thanks to Alex's help, we can now cover even more funds. And, on that note.... onto the 13F! The following are Maverick Capital's current holdings as of June 30th 2008, as released in their most recent 13F filing with the SEC. The positions in this most recent 13F were compared to last quarter's 13F and here are the changes made to their portfolio:

New Positions:
First Solar (FSLR): 1,202,118 shares. This position is 2.93% of Maverick's portfolio.
Lorillard (LO): 3,820,856 shares. This position is 2.36% of Maverick's portfolio.
CVS Caremark (CVS): 5,912,073 shares. This position is 2.09% of Maverick's portfolio.
Netapp (NTAP): 9,331,862 shares. This position is 1.81% of Maverick's portfolio.
ITT Educational Services (ESI): 2,422,090 shares. This position is 1.79% of Maverick's portfolio.
Macy's (M): 9,008,174 shares. This position is 1.56% of Maverick's portfolio.
Hansen Natural (HANS): 5,712,952 shares. This position is 1.47% of Maverick's portfolio.
Polo Ralph Lauren (RL): 2,431,244 shares. This position is 1.36% of Maverick's portfolio.
Dicks Sporting Goods (DKS): 7,589,473 shares. This position is 1.20% of Maverick's portfolio.
Cigna Corp (CI): 2,931,045 shares. This position is 0.93% of Maverick's portfolio.
Digital River Inc (DRIV): 1,974,144 shares. This position is 0.68% of Maverick's portfolio.
Viacom Inc (VIA): 2,442,500 shares. This position is 0.67% of Maverick's portfolio.
Forest Labs (FRX): 1,789,900 shares. This position is 0.56% of Maverick's portfolio.
Lamar Advertising (LAMR): 1,542,918 shares. This position is 0.50% of Maverick's portfolio.
Visa (V): 565,005 shares. This position is 0.41% of Maverick's portfolio.
South Financial Group (TSFG): 50,000 shares. This position is 0.38% of Maverick's portfolio.
Athena Health (ATHN): 1,245,819 shares. This position is 0.34% of Maverick's portfolio.
National City Corp (NCC): 6,625,176 shares. This position is 0.28% of Maverick's portfolio.
Sohu.com Inc (SOHU): 170,485 shares. This position is 0.11% of Maverick's portfolio.
MSCI Inc (MXB): 287,186 shares. This position is 0.09% of Maverick's portfolio.
Universal American (UAM): 1,004,391 shares. This position is 0.09% of Maverick's portfolio.
Comscore (SCOR): 436,640 shares. This position is 0.09% of Maverick's portfolio.
Citizens Republic Bancorp (CRBC): 937,500 shares. This position is 0.02% of Maverick's portfolio.


Added to:
Berkshire Hathaway (BRK.B): Increased position by 1412%. Position is now 0.45% of their portfolio.
Gmarket (GMKT): Increased position by 317%. Position is now 0.19% of their portfolio.
Infinera (INFN): Increased position by 171%. Position is now 0.54% of their portfolio.
American Capital (ACAS): Increased position by 141%. Position is now 0.30% of their portfolio.
Nordstrom (JWN): Increased position by 136.61%. Position is now 2.79% of their portfolio.
America Movil (AMX): Increased position by 129.88%. Position is now 3.91% of their portfolio.
Lexmark (LXK): Increased position by 109.39%. Position is now 1.42% of their portfolio.
Citrix (CTXS): Increased position by 109.36%. Position is now 2.20% of their portfolio.
Bank of New York Mellon (BK): Increased position by 55.42%. Position is now 3.15% of their portfolio.
Baxter Intl (BAX): Increased position by 51.69%. Position is now 2.90% of their portfolio.
Advanced Micro Devices (AMD): Increased position by 45.89%. Position is now 2.87% of their portfolio.
Raytheon (RTN): Increased position by 41.72%. Position is now 2.58% of their portfolio.
Fidelity National Info (FIS): Increased position by 40.56%. Position is now 2.05% of their portfolio.
Covidien (COV): Increased position by 32.99%. Position is now 2.32% of their portfolio.
Liberty Media Corp (LMDIA): Increased position by 28.09%. Position is now 1.59% of their portfolio.
Resmed (RMD): Increased position by 26.46%. Position is now 0.74% of their portfolio.
Burlington Northern (BNI): Increased position by 22.73%. Position is now 1.83% of their portfolio.
Google (GOOG): Increased position by 22.27%. Position is now 1.72% of their portfolio.
Genentech (DNA): Increased position by 21.38%. Position is now 1.40% of their portfolio.
Zimmer Holdings (ZMH): Increased position by 20.28%. Position is now 1.73% of their portfolio.
Cypress Bioscience (CYPB): Increased position by 19.98%. Position is now 0.20% of their portfolio.
Apple (AAPL): Increased position by 19.45%. Position is now 4.09% of their portfolio.
Research in Motion (RIMM): Increased position by 15.41%. Position is now 4.08% of their portfolio.
MetroPCS Comm (PCS): Increased position by 13.6%. Position is now 0.77% of their portfolio.
Home Inns & Hotels (HMIN): Increased position by 7.72%. Position is now 0.54% of their portfolio.
Gilead Sciences (GILD): Increased position by 6.66%. Position is now 2.37% of their portfolio.
Marvell Technology (MRVL): Increased position by 5.24%. Position is now 3.08% of their portfolio.
Newstar Financial (NEWS): Increased position by 5.21%. Position is now 0.14% of their portfolio.
Cardinal Health (CAH): Increased position by 3.33%. Position is now 1.56% of their portfolio.
Amylin Pharma (AMLN): Increased position by 2.84%. Position is now 0.58% of their portfolio.
Discovery Holding (DISCA): Increased position by 1.74%. Position is now 1.21% of their portfolio.
Palm (PALM): Increased position by 1.40%. Position is now 0.51% of their portfolio.
Lumber Liquidators (LL): Increased position by 1.14%. Position is now 0.26% of their portfolio.
China Nepstar (NPD): Increased position by 0.75%. Position is now 0.18% of their portfolio.
First Advantage (FADV): Increased position by 0.65%. Position is now 0.15% of their portfolio.
Under Armour (UA): Increased position by 0.17%. Position is now 0.83% of their portfolio.
Mylan Inc (MYL): Increased position by 0.06%. Position is now 1.09% of their portfolio.
Monsanto (MON): Increased position by 0.04%. Position is now 1.68% of their portfolio.
Potash (POT): Increased position by 0.03%. Position is now 2% of their portfolio.


Reduced positions:
Thermo Fisher (TMO): Reduced their position by 4.91%. Position is now 1.68% of their portfolio.
Western Union (WU): Reduced their position by 10.2%. Position is now 2.08% of their portfolio.
Marsh & Mclennan (MMC): Reduced their position by 12%. Position is now 1.55% of their portfolio.
Textron Inc (TXT): Reduced their position by 18.93%. Position is now 1.44% of their portfolio.
Wyeth (WYE): Reduced their position by 20.6%. Position is now 1.46% of their portfolio.
Leap Wireless (LEAP): Reduced their position by 23.40%. Position is now 0.39% of their portfolio.
Trubion Pharma (TRBN): Reduced their position by 24.38%. Position is now 0.04% of their portfolio.
Dish Network (DISH): Reduced their position by 27.75%. Position is now 1.13% of their portfolio.
Avon Products (AVP): Reduced their position by 33.23%. Position is now 1.36% of their portfolio.
JP Morgan Chase (JPM): Reduced their position by 38.68%. Position is now 0.89% of their portfolio.
Cognizant (CTSH): Reduced their position by 42.97%. Position is now 0.85% of their portfolio.
DirecTV (DTV): Reduced their position by 49.69%. Position is now 0.83% of their portfolio.
Suntrust Banks (STI): Reduced their position by 50%. Position is now 0.16% of their portfolio.
Gamestop (GME): Reduced their position by 51.64%. Position is now 0.81% of their portfolio.
Corcept (CORT): Reduced their position by 57.49%. Position is now 0.01% of their portfolio.
Bluefly (BFLY): Reduced their position by 90%. Position is now 0.11% of their portfolio.
Berkshire Hathaway (BRK.A): Reduced their position by 95%. Position is now 0.66% of their portfolio.


Removed Positions (Positions Maverick sold out of completely):
Hanesbrands (HBI)
Autozone (AZO)
Bankrate (RATE)
CNET (CNET)
Crocs (CROX)
Cumulus Media (CMLS)
Harmonic (HLIT)
Loews (L)
Move Inc (MOVE)
Nucor (NUE)
OfficeMax (OMX)
Qualcomm (QCOM)
Salesforce (CRM)
Sandisk (SNDK)
Sears (SHLD)
Starbucks (SBUX)
UnitedHealth (UNH)


Positions with no change:
VMWare (VMW). Position is 0.59% of their portfolio.
BPW Acquisition (BPW). Position is 0.18% of their portfolio.
FIrst Marblehead (FMD). Position is 0.05% of their portfolio.
Ultra Clean Holdings (UCTT). Position is 0.01% of their portfolio.
Vivus (VVUS). Position is 0.01% of their portfolio.


Top 20 holdings by % of portfolio:
1. Apple (AAPL): 4.09% of the portfolio
2. Research in Motion (RIMM): 4.08% of the portfolio
3. America Movil (AMX): 3.91% of the portfolio
4. Bank of New York Mellon (BK): 3.15% of the portfolio
5. Marvell Tech (MRVL): 3.08% of the portfolio
6. First Solar (FSLR): 2.93% of the portfolio
7. Baxter Intl (BAX): 2.90% of the portfolio
8. Advanced Micro (AMD): 2.87% of the portfolio
9. Nordstrom (JWN): 2.79% of the portfolio
10. Raytheon (RTN): 2.58% of the portfolio
11. Gilead (GILD): 2.37% of the portfolio
12. Lorillard (LO): 2.36% of the portfolio
13. Covidien (COV): 2.32% of the portfolio
14. Citrix (CTXS): 2.20% of the portfolio
15. CVS Caremark (CVS): 2.09% of the portfolio
16. Western Union (WU): 2.08% of the portfolio
17. Fidelity National Info (FIS): 2.05% of the portfolio
18. Potash (POT): 2.00% of the portfolio
19. Burlington Northern (BNI): 1.83% of the portfolio
20. Netapp (NTAP): 1.81% of the portfolio

----------------------------------------------------

Breakdown: Maverick changed up their portfolio a decent amount over the past quarter. Most notable are their changes within their top 10 holdings. Hedge fund favorite Qualcomm (QCOM) was Maverick's 3rd largest holding last filing. This filing, they no longer even hold a position. Additionally, they were selling off chunks of other top 10 holdings from last quarter. They sold off 33% of their position in Avon Products (AVP), which was their 4th largest holding just one quarter ago. They also sold over 51% of their Gamestop (GME) position, which last quarter was their 7th largest holding. With those positions vacating their place in the top 10 holdings of Maverick's portfolio, new holdings obviously took their place. America Movil (AMX), another hedge fund favorite, was Maverick's 9th largest holding last time. This time, they increased their position by 129% and it is now their 3rd largest holding. They obviously used the weakness in this name to add to their position, just like fellow 'Tiger Cub' fund Lone Pine Capital, as I wrote about here. Maverick also added heavily to Nordstrom (JWN), increasing their position by 136% and making it now their 9th largest holding.

Maverick was out adding to tech across the board. Apple (AAPL) and Research in Motion (RIMM) are their top 2 largest holdings respectively, as they boosted their positions in both by over 14% each. Additionally, they added to their Marvell (MRVL) position, bringing it up to the fund's 5th largest position now. Maverick also continues to build a position in Advanced Micro Devices (AMD), as it now is their 8th largest holding.

Among their new positions this quarter are First Solar (FSLR), Lorillard (LO), and CVS Caremark (CVS). I highlight these three in particular because Maverick started large, new positions in all three names. First Solar (FSLR) was brought up all the way to the fund's 6th largest holding after not even owning shares last quarter. They started a new position in CVS Caremark (CVS) and brought it up to the fund's 15th largest holding. Also, they added heavily to Lorillard (LO) as well, making this new position their 12th largest holding. This position is interesting because we also saw Lone Pine Capital (ran by Stephen Mandel Jr.) start a new position in this exact same name, as I wrote about here. And, actually, this is not the only position that both Maverick and Lone Pine both started together. In this 13F filing, we see that Maverick started a position in Hansen Natural (HANS). And, as I wrote about here, Lone Pine recently disclosed that they have a 7.8% stake in HANS. It's definitely common to see many similar positions within the portfolios of various 'Tiger Cub' managers who now run their own funds because they all undoubtedly keep in touch and come from the same school of thought.

One last thing I would like to point out is Maverick selling completely out of various consumer related names. They sold completely out of their positions in Autozone (AZO), Hanesbrands (HBI), Sears (SHLD), Starbucks (SBUX), Crocs (CROX), and OfficeMax (OMX).

You can view their most recent 13F as filed with the SEC here.

Check back each day this week as my 13F tracking series continues. Funds I will be covering this week include: Paul Tudor Jones' Tudor Investment Corp, Louis Bacon's Moore Capital Management, Boone Pickens' BP Capital, and Timothy Barakett's Atticus Capital.