Farallon Capital Shows DermTech Stake

Andrew Spokes' hedge fund firm Farallon Capital has filed a 13G with the SEC regarding shares of DermTech (DMTK).  Per the filing, Farallon now owns 9.8% of DermTech as of August 29th with exposure to over 1.23 million shares. 

Their stake is comprised of 615,385 shares and they also hold "Series A Preferred Shares (as defined in the Preliminary Note) convertible into an aggregate of 615,385 shares."

DermTech shares have been extremely volatile, plummeting from $21.69 in late August to around $5 by the end of the month.

Per Yahoo Finance, DermTech is "a molecular genomics company, develops and markets novel non-invasive diagnostic tests to diagnosis skin cancer and related conditions in the United States. The company offers Pigmented Lesion Assay (PLA), a gene expression test that helps rule out melanoma and the need for a surgical biopsy of atypical pigmented lesions. It also provides Nevome test, an adjunctive reflex test for the PLA; and adhesive skin sample collection kits, as well as gene expression assays for the Th1, Th2, IFN-gamma, and Th17 inflammatory pathways. The company sells its products to pathology and oncology practitioners. DermTech, Inc. was incorporated in 1995 and is headquartered in La Jolla, California."

Farallon Capital Shows Savara Stake

Andrew Spokes' hedge fund firm Farallon Capital has filed a 13G with the SEC regarding shares of Savara (SVRA).  Per the filing, Farallon now owns 9.5% of the company with over 2.22 million shares.

This is a newly disclosed equity stake and the filing was made due to activity on June 2nd.  It's worth noting that Savara recently closed on a merger with Mast Therapeutics in April of this year.  In conjunction with the merger, Master effected a 1 for 70 reverse stock split. 

Also, Savara this month completed an underwritten public offering of over 9 million shares of common stock at $4.75 per share.

Per Google Finance, Savara is "formerly Mast Therapeutics, Inc., is a clinical-stage pharmaceutical company. The Company is focused on the development and commercialization of novel therapies for the treatment of patients with rare respiratory diseases. Its pipeline includes AeroVanc, Molgradex and AIR001. AeroVanc is an inhaled formulation of vancomycin, which the Company is developing for the treatment of persistent methicillin-resistant Staphylococcus aureus, lung infection in cystic fibrosis patients. Molgradex is an inhaled formulation of recombinant human granulocyte-macrophage colony-stimulating factor. It is developing Molgradex for the treatment of autoimmune pulmonary alveolar proteinosis, a rare lung disease. AIR001 is a sodium nitrite solution for inhalation via nebulization. AIR001 is in Phase II clinical development for the treatment of heart failure with preserved ejection fraction, also known as diastolic heart failure or heart failure with preserved systolic function."

Farallon Capital Increases Perfect World Stake

Andrew Spokes' hedge fund firm Farallon Capital has filed a 13D with the SEC regarding their position in Perfect World (PWRD).  Per the filing, Farallon now owns 8.6% of the company with 18,950,000 shares.

This marks an sizable increase in their position size after owning only 1.32 million shares as of the end of the first quarter.  The 13D contains the standard boilerplate that they might engage the company, etc.

Perfect World received a takeout offer from its Chairman, Michael Yufeng Chi, to acquire all shares for $20 per ADR share.  Farallon was out buying shares in April, sporadically throughout May, and into early June at prices around $19.90.

You can view additional portfolio activity from Farallon here.

Per Google Finance, Perfect World is "an online game developer and operator in China. The Company develops online games based on its game engines and game development platforms. Its technology capabilities consist of its game engines, game development platforms and real-time anti-cheating, all developed and built by its development team. The Company operates in two segments: PRC operations and International operations."

Farallon Capital Trims Hudson Pacific Properties Stake

Andrew Spokes' hedge fund firm Farallon Capital has filed an amended 13D with the SEC regarding their stake in Hudson Pacific Properties (HPP).  Per the filing, Farallon now owns 4.1% of the company with over 3.63 million shares.

Their most recent filing was required due to activity on April 10th as Farallon Funds "completed an underwritten public offering of 6,037,500 shares."

Back in January of this year, they had disclosed exposure of over 8.7 million shares, so their net position has decreased by around 5 million shares since then.

Per Google Finance, Hudson Pacific Properties is "a full-service, vertically integrated real estate investment trust (REIT), focused on owning, operating and acquiring high-quality office and media and entertainment properties in select growth markets primarily in Northern and Southern California. Its investment strategy is focused on high barrier-to-entry, in-fill locations with favorable, long-term supply demand characteristics."

For more from this hedge fund, head to other recent portfolio activity from Farallon here.

Farallon Capital Discloses Sky Solar Stake, Adds Board Members At Town Sports

Andrew Spokes' hedge fund firm Farallon Capital has submitted two filings with the SEC recently.

Discloses Sky Solar Stake

First, Farallon filed a 13G regarding shares of Sky Solar (SKYS).  Per the filing, Farallon has disclosed a 7.7% ownership stake in SKYS with 30 million shares.

This is a newly disclosed equity position for the firm and the filing was made due to activity on March 13th.  Sky Solar went public in November 2014.

Per Google Finance, Sky Solar is "independent power producer (IPP) that develops owns and operates solar parks around the world. The Company focuses on the downstream photovoltaic segment of the market."


Adds Board Members At Town Sports International Holdings

Second, Farallon filed an amended 13D with the SEC regarding its stake in Town Sports International Holdings (CLUB).  Per the filing, Farallon now has 2 of the 8 board seats at the company.  Farallon's ownership stake remains unchanged at 16.7% of the company with over 4 million shares.

Per Google Finance, Town Sports is "an owner and operator of fitness clubs in the Northeast and Mid-Atlantic regions of the United States and a fitness club owner and operator in the United States in each case based on the number of clubs. The Company operates 162 fitness clubs under its four regional brand names; New York Sports Clubs (NYSC), Boston Sports Clubs (BSC), Philadelphia Sports Clubs (PSC) and Washington Sports Clubs (WSC)."

Farallon Capital Discloses KLX Position (Spin-Off From B/E Aerospace)

Andrew Spokes' hedge fund firm Farallon Capital has filed a 13G with the SEC regarding shares of KLX Inc (KLXI).  Per the filing, Farallon now owns 7% of the company with 3,675,000 shares.

This is a newly disclosed equity position for the firm and the filing was made due to activity on January 16th.  KLX was recently spun-off from B/E Aerospace (BEAV) and BEAV shareholders received 1 KLXI share for every 2 BEAV shares held.

Given that Farallon didn't own BEAV as of the end of the third quarter, they either bought BEAV in the fourth quarter and then received KLXI shares in the spin-off, or they just purchased KLXI straight up once it was separated.

Per Google Finance, KLX is "the distributor and service provider of aerospace fasteners and consumables. The Company offers ranges of aerospace hardware and consumables, and inventory management services across the world. The Company operates in two segments: Aerospace Solutions Group (ASG) segment and Energy Services Group (ESG) segment. Its customers include oil and gas companies that are engaged in the exploration, and production and development of oil and gas properties. The Company through its network and information technology systems offer services to commercial airliners, business jet and defense original equipment manufacturer (OEMs) and its subcontractors, airlines, and maintenance, repair and overhaul (MRO) operators. The Company provides access to over one million stock keeping unit (SKUs). Its systems support both internal distribution processes, along with customer services, including just-in-time deliveries and kitting solutions."

Farallon Capital Discloses Gleacher Stake

Andrew Spokes' hedge fund firm Farallon Capital has filed a 13G with the SEC regarding Gleacher (GLCH).  Per the filing, the hedge fund has disclosed a 7.3% ownership stake in Gleacher with 451,000 shares.

The filing was made due to portfolio activity on May 2nd.  The company's board of directors has approved a liquidation of assets.

Per Google Finance, Gleacher is "an investment bank that provides corporate and institutional clients with financial advisory services, including merger and acquisition, restructuring, recapitalization, and strategic alternative analysis. Gleacher offers a range of products through its Investment Banking, Mortgage Backed/Asset Backed & Rates (MBS/ABS & Rates), Corporate Credit and ClearPoint divisions. It also provides capital raising, research-based investment analysis, and securities brokerage services, and, through the Company's ClearPoint Funding, Inc. subsidiary (ClearPoint), engages in residential mortgage lending."

Farallon Capital Discloses Sycamore Networks Stake

Andrew Spokes' hedge fund Farallon Capital has disclosed a new stake in Sycamore Networks (SCMR). 

Per a 13G filed with the SEC, the hedge fund now owns 9.5% of SCMR with 2.745 million shares.  The filing was made due to portfolio activity on December 31st.

Per Google Finance, Sycamore Networks is "develops and markets intelligent bandwidth management solutions for fixed line and mobile network operators worldwide and provides services associated with such products. The Company’s customers include domestic and international wireline and wireless network service providers, utility companies, enterprises, and government entities. Sycamore’s bandwidth management portfolio of optical switches, multiservice cross-connects and multiservice access platforms serve applications across the network infrastructure, from multiservice access and regional backhaul to the optical core. It also develops and markets a mobile broadband optimization solution for mobile operators to reduce congestion in mobile access networks. The Company’s products serve two market areas within the networking industry, bandwidth management and mobile broadband optimization."

Farallon Capital Discloses New Stake in Horizon Pharma

Thomas Steyer's hedge fund firm Farallon Capital has just now filed a 13G on shares of Horizon Pharma (HZNP).  This is a brand new position for the hedge fund as they did not report ownership back in the second quarter.

Farallon has disclosed a 5.4% ownership stake in the company with 1,883,071 shares.  The SEC filing was required due to portfolio activity on September 7th.

Per Google Finance, Horizon Pharma is "a biopharmaceutical company that develops and commercializes medicines to target unmet therapeutic needs in arthritis, pain and inflammatory diseases."

Hedge Fund Farallon Sells Some Beacon Roofing Supply (BECN)

Hedge fund Farallon Capital Management just filed an amended 13G with the SEC regarding its position in Beacon Roofing Supply (BECN). Due to portfolio activity on December 31st, 2010, Farallon has disclosed a 3.5% ownership stake in BECN with 1,587,100 shares.

This signifies a slight reduction in their position size. At the end of the third quarter (September 30th, 2010), the hedge fund owned 1,869,032 shares. So over the past three months they've reduced their position by 15%.

Farallon was founded by Thomas Steyer in 1986 and today is a multi-billion dollar firm. They invest across the spectrum in equities, private investments, debt and real estate. Typically though, they focus on risk arbitrage. For an example of the types of investments Farallon makes, we examined their Alcon (ACL) play in a consensus hedge fund arbitrage trade.

Per Google Finance, Beacon Roofing Supply is "a distributor of residential and non-residential roofing materials in the United States and Canada. The Company also distributes complementary building materials, including siding, windows, specialty lumber products and waterproofing systems for residential and non-residential building exteriors."

Alcon Agrees Novartis Deal in Consensus Hedge Fund Arbitrage Trade

Alcon (ACL) has reached an agreement to sell the remaining 23% of the company to Swiss drug maker, Novartis (NVS). Novartis is offering 2.8 shares of NVS for each share of ACL, the equivalent of $168 for each ACL share. The deal is supposed to close in the first half of 2011, pending shareholder approval.

While Novartis' offer comes in at $168 per share, ACL is currently trading just above $164. The deal is contingent upon shareholder approval and if you examine the list of shareholders, it's littered with prominent hedge funds. Back in the second quarter issue of our Hedge Fund Wisdom newsletter, we flagged Alcon (ACL) as a 'consensus buy' due to numerous hedge funds starting and accumulating positions in the company. You can check out a full free sample issue here.

Then in our new third quarter issue, we singled out Alcon as a featured hedge fund merger arbitrage play three weeks ago. To understand the hedge fund investment thesis, here's some of our commentary from our newsletter:

"Alcon was purchased by Nestle in 1977. Nestle floated to the public a 25% stake in the company in 2002. In April 2008, Novartis (NVS) purchased from Nestle a 25% stake in Alcon for $143 per share. And in August of 2010, Novartis exercised its call option to acquire Nestle’s remaining stake at a price of $181 per share.

In January 2010, Novartis made an offer of 2.8 shares of Novartis stock for each share of Alcon for the stake owned by the public (which currently values Alcon at $156 per share). Still, Alcon is trading at $163 because the offer has been rebuffed so far and investors are looking for a more equitable offer to the Nestle stake takeout that was done at $181. Arbitrageurs are betting that Novartis will increase the effective exchange ratio, so they buy Alcon and short Novartis in order to hedge out the risk that Novartis shares may go down by the time the deal closes.

Novartis closed its acquisition of Nestlé’s stake in 3Q, which increased investors’ confidence that a buyout of the public shares will happen sooner rather than later. In addition, Alcon’s share price is tied to the value implied by the exchange ratio offered by Novartis. So, as Novartis’ shares dropped in late 2Q / early 3Q, so did Alcon shares. At $135, the spread to the Nestle takeout at $181 was seen as too wide and the value of Alcon’s franchise was under-appreciated by the market.

This combination motivated some new funds to add Alcon to their portfolio. Magnetar Capital started a new position in Alcon and made it its top portfolio holding with a 12% weight. Steven Cohen’s SAC Capital maintained Alcon as its #1 position and increased its exposure during the quarter by 20%. John Paulson’s hedge fund Paulson & Co increased its exposure by 30%. Highbridge Capital doubled its position while Jamie Dinan’s York Capital and Thomas Steyer’s Farallon Capital also added shares of ACL. And while some funds are obviously short Novartis as part of the arbitrage pair (though they don’t disclose it), other funds have elected to purchase puts on Novartis to round out the merger-arb trade."

Given the quantity and quality of hedge funds involved in this trade, it will be very interesting to see if they approve the current deal valued at $168 per each ACL share or if they push for the same $181 per share that Novartis paid Nestle. With shares still trading slightly below the deal price, it will be interesting to follow.

The above is the type of research and analysis we cover in our Hedge Fund Wisdom newsletter. Be sure to click here for a free sample issue as we examine the investment theses behind hedge fund trades.

Hedge Fund Farallon Capital Still Shows Energy Partners (EPL) Stake

Thomas Steyer's hedge fund firm Farallon Capital recently filed a 13G with the SEC regarding Energy Partners Ltd (EPL). As of April 15th, 2010 Farallon Capital shows a 7.1% ownership stake in the company with 2,859,337 shares. This is the exact same amount of shares they owned back on December 31st, 2009 when we covered Farallon's portfolio so there is no adjustment to their position. While nothing major has happened with their stake, we do learn that they at least still hold their position and so we thought we'd pass that information along for those interested.

The hedge fund filed the amended 13G to adjust the managing members of their firm listed as beneficial owners of the stock. As we've detailed in the past, it's extremely likely that Farallon received their equity position in EPL from a debt-to-equity conversion. Thomas Steyer founded Farallon in 1986 and today it is a multi-billion dollar hedge fund that invests in equities, private investments, debt, and real estate. Typically, they focus on risk arbitrage strategies. Taken from Google Finance, Energy Partners is "an independent oil and natural gas exploration and production company."

Thomas Steyer's Farallon Capital Focused On Risk Arbitrage: 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 Thomas Steyer's hedge fund Farallon Capital. Steyer founded Farallon in 1986 and today it is a multi-billion dollar hedge fund that invests in equities, private investments, debt, and real estate. Typically though, they're focused on risk arbitrage strategies and you'll find a lot of evidence of this in their portfolio below. In terms of other recent activity, we saw that Farallon disclosed their large position in FreightCar America (RAIL) and have been selling shares of Knology (KNOL).

The positions listed below were Farallon's 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
Sun Microsystems (JAVA) ~ inactive
Affiliated Comp Services (ACS) ~ inactive
Home Depot (HD) ~ inactive
Wells Fargo (WFC)
XTO Energy (XTO)
Dollar General (DG)
Encore Acquisition (EAC)
Sherwin Williams (SHW)
Verisk Analytics (VRSK)
Covidien (COV)
Energy Partners (EPL) ~ this was a result of a debt to equity conversion
Expedia (EXPE) Puts
Delta Airlines (DAL)


Increased Positions
Charles Schwab (SCHW): Increased by 309%
Beacon Roofing (BECN): Increased by 167% ~ we also detailed this increase
Burlington Northern (BNI): Increased by 137% ~ now inactive after the Berkshire Hathaway purchase
Old Dominion (ODFL): Increased by 103%
BMC Software (BMC): Increased by 98%
China Housing & Land (CHLN): Increased by 88%
Crown Castle (CCI): Increased by 75.5%
Monsanto (MON): Increased by 62.5%
SBA Communications (SBAC): Increased by 44.8%
Oracle (ORCL): Increased by 43%
Jones Lang Lasalle (JLL): Increased by 33.5%
Express Scripts (ESRX): Increased by 30.8%


Reduced Positions
Visa (V): Reduced by 53.8%
MSCI (MXB): Reduced by 47%
Hurray Holdings (HRAY): Reduced by 43.5%
GeoEye (GEOY): Reduced by 33.2%
JB Hunt (JBHT): Reduced by 22.4%
Discovery Communications (DISCA): Reduced by 20.4%
Knology (KNOL): Reduced by 14.8% ~ we already knew of these sales


Removed Positions (Sold out completely):
Aetna (AET) Calls
Capitalsource (CSE)
Apollo Group (APOL)
iShares Russell 2000 (IWM) Puts
Focus Media (FMCN)
Mastercard (MA)
America Movil (AMX)
Rockwell Collins (COL)
Eastman Kodak Bonds
Priceline.com (PCLN)
Marvel Entertainment (MVL)
Google (GOOG)


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

1. Sun Microsystems (JAVA): 12.97%
   
2. Burlington Northern Santa Fe (BNI): 7.63%
   
3. Affiliated Comp Services (ACS): 6.99%
   
4. Visa (V): 3.88%
   
5. Home Depot (HD): 3.69%
   
6. Wells Fargo (WFC): 3.59%
   
7. XTO Energy (XTO): 3.50%
   
8. Oracle (ORCL): 3.41%
   
9. Jones Lang Lasalle (JLL): 3.08%
   
10. Crown Castle (CCI): 3.06%
    
11. Dollar General (DG): 2.85%
    
12. Charles Schwab (SCHW): 2.80%
    
13. BMC Software (BMC): 2.77%
    
14. Monsanto (MON): 2.40%
    
15. Yingli Green Energy Bonds: 2.40%
    

As you can see, a lot of Farallon's holdings were arbitrage related. Their top three holdings are no longer active stocks as they've all completed their merger processes: Sun Micro, Burlington Northern, and Affiliated Comp. A lot of their top holdings were also brand new holdings including Wells Fargo, Home Depot and Dollar General. This is directly in line with what we've seen out of hedge fund land lately. In fact, Wells Fargo was one of the most added stocks by hedge funds in the fourth quarter. Overall, Farallon reduced exposure to services and increased technology exposure.

Steyer's hedge fund firm completely sold out of a number of notable stakes (including Capitalsource which we previously detailed). They also dumped shares of Apollo Group (APOL) which is interesting as we've started to see hedge funds take divergent paths on this name. Some funds like Farallon have sold out, while others like Chase Coleman's Tiger Global have taken large stakes. Another interesting choice Steyer's hedge fund made was to sell completely out of Mastercard (MA) while still holding shares of Visa. Previously, hedgies had owned both of the payment processors. Nowadays it seems many funds are choosing one or the other. Farallon has chosen Visa, but note that they did sell some shares of V as well.

Data used for this article comes from Alphaclone, our source for backtesting strategies and sorting through all the hedge fund portfolio maneuvers with ease. Assets reported on the 13F filing were $2.0 billion this quarter compared to $1.4 billion last quarter. 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, and Roberto Mignone's Bridger Management. Check back daily for our new updates.

Thomas Steyer Shows 9.9% Stake in FreightCar America (RAIL)

Thomas Steyer's hedge fund Farallon Capital has filed an amended 13G with the SEC on shares of FreightCar America (RAIL). Farallon is now showing a 9.9% ownership stake with an aggregate of 1,180,000 shares. While this is an increase from the 6.2% Farallon stake we covered back in March of 2009, Farallon has not added shares since September 30th, 2009. Their 13F filing (which details positions as of Sept. 30th) shows the same share total of 1,180,000. So, nothing really new to report here other than the fact that they still own it. Recent activity out of Farallon includes them selling shares of Knology (KNOL) and adding to their Beacon Roofing position (BECN).

Taken from Google Finance, FreightCar America is "a manufacturer of aluminum-bodied railcars in North America, based on the number of railcars delivered. The Company specializes in the production of aluminum-bodied coal-carrying railcars, with a range of railcar types, including aluminum-bodied and steel-bodied railcars. It also refurbish and rebuild railcars and sell forged, cast and fabricated parts for all of the railcars it produces, as well as those manufactured by others. The Company’s primary customers are railroads, shippers and financial institutions."

Steyer's Hedge Fund Farallon Sells Some Knology (KNOL)

In an amended 13G filed with the SEC, Thomas Steyer's hedge fund firm Farallon Capital has updated their stake in Knology (KNOL). They are now showing a 9.3% ownership stake in the company with 3,342,394 shares. The filing was made due to activity on December 31st, 2009 and this is a slight decrease in their position. According to their last disclosure of positions on September 30th, 2009, Farallon owned 3,924,177 shares. This means that they have sold 581,783 shares, a 14.8% decrease over the past three and a half months. You can view the rest of Farallon's portfolio here.

We've also covered other activity out of Thomas Steyer's hedge fund firm over the past few months. They recently added to their Beacon Roofing (BECN) stake and made a few portfolio and internal firm adjustments as well. Farallon is a multi-billion dollar hedge fund founded in 1986 that typically employs risk arbitrage strategies.

Taken from Google Finance, Knology is "an integrated provider of video, voice, data and advanced communications services to residential and business customers in 10 markets in the Southeastern United States and two markets in the Midwestern United States. The Company provides its services over its wholly owned, fully upgraded minimum 750 megahertz interactive broadband network."

Hedge Fund Farallon Capital: Portfolio Update (13F Filing)

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.

Next up in our series is Thomas Steyer's hedge fund firm Farallon Capital. Thomas Steyer founded Farallon in 1986 and today it is a multi-billion dollar hedge fund that typically uses risk arbitrage strategies and invests in equities, private investments, debt, and real estate. Previously, he was an analyst for Morgan Stanley in their Mergers & Acquisitions department and also an associate on Goldman Sachs' risk arbitrage desk. Steyer graduated Summa Cum Laude from Yale University and also received his MBA from Stanford's Graduate School of Business. In the past, Farallon was ranked third in Alpha's 2008 hedge fund rankings. In terms of recent portfolio adjustments from Farallon, we saw they were just adding to their Beacon Roofing (BECN) stake. For more recent activity out of Farallon head to our post on their portfolio and internal firm adjustments.

Keep in mind that the positions listed below were Farallon'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:
Aetna (AET) Calls
Yingli Energy Bond
Focus Media (FMCN)
Jones Lang Lasalle (JLL)
Capitalsource Bonds
Express Scripts (ESRX)
Monsanto (MON)
Crown Castle (CCI)
BMC Software (BMC)
Rockwell Collins (COL)
JB Hunt Transport (JBHT)
Eastman Kodak Bond
SBA Communications (SBAC)
Marvel Entertainment (MVL)
Beacon Roofing (BECN) ~ They've since updated their stake
Charles Schwab (SCHW)
Google (GOOG)
Old Dominion Freight (ODFL)
Linktone (LTON)
Hurray Holding (HRAY)
China Housing & Land Development (CHLN)


Some Increased Positions
Positions they already owned but added shares to:
Visa (V): Increased position by 144.4%
Sirius Satellite Note: Increased by 85.4%
Carrizo Oil & Gas Bond: Increased by 63%
Mastercard (MA): Increased by 42%
Apollo Group (APOL): Increased by 38.1%
MSCI (MXB): Increased by 22.3%


Some Reduced Positions
Stakes they sold shares in but still own:
AmericaMovil (AMX): Reduced position by 54.2%
Priceline (PCLN): Reduced by 52%
Capitalsource (CSE): Reduced by 37.8% ~ we covered these sales as they happened
Kendle International Bond: Reduced by 19.6%


Removed Positions
Positions they sold out of completely:
Lucent Technologies (convertibles)
Financial Select Sector ETF (XLF) Puts
Qualcomm (QCOM)
Moody's (MCO)
Fidelity National Information (FIS)
Metavante Tech (MV)
Arch Capital Group (ACGL)
Amdocs (DOX)
Conway (CNW)
Solutia (SOA)
Sherwin Williams (SHW)
CTC Media (CTCM)
Pinnacle Entertainment (PNK)


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

1. Aetna (AET) Calls: 9.38%
2. Visa (V): 9.24%
3. Capitalsource (CSE): 5.41%
4. MSCI (MXB): 4.37%
5. Apollo Group (APOL): 3.78%
6. Burlington Northern Santa Fe (BNI): 3.62%
7. Discovery Communications (DISCA): 3.49%
8. Yingli Energy Bond: 3.36%
9. iShares Russell 2000 (IWM) Puts: 3.11%
10. Focus Media (FMCN): 3.1%
11. Oracle (ORCL): 2.81%
12. Knology (KNOL): 2.58%
13. Jones Lang Lasalle (JLL): 2.51%
14. Sirius Satellite Note: 2.44%
15. Transdigm (TDG): 2.43%
    

The main talking point in Farallon's quarter over quarter changes was their brand new stake in Aetna (AET) calls. They ratcheted this up to over 9% of their reported 13F assets as the position was worth $139 million at the end of the third quarter. Other brand new positions in their top ten holdings include Yingli Green Energy bonds and shares of Focus Media (FMCN).

While their stake in Visa (V) is not a new position, they did double down and then some. This is easily one of the most popular hedge fund holdings we've seen in the select funds we track. Meaningful positions they no longer own include Lucent Technologies convertibles (previously a 4.8% stake), Qualcomm (QCOM - previously a 3.5% holding), and puts on the financial sector (XLF). They also completely sold out of Moody's (MCO) which is interesting seeing how Warren Buffett has been selling as well. Overall, Steyer's hedge fund firm increased their holdings in the services sector and reduced their holdings in financials and technology.

Assets from the collective holdings reported to the SEC via 13F filing were $1.4 billion this quarter compared to $1 billion last quarter. They were mainly out adding to positions across the portfolio. As a multi-billion dollar hedge fund, Farallon obviously has positions in other markets as well since their long US equities book is only comprised of a little over $1 billion. 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). Check back daily as we'll be covering new hedge fund portfolios.

Hedge Fund Farallon Capital Adds To Beacon Roofing Supply (BECN) Stake

In a 13G filed with the SEC, Thomas Steyer's hedge fund firm Farallon Capital has updated their holdings in Beacon Roofing Supply (BECN). Due to activity on December 3rd, Farallon now has a 5.6% ownership stake in with 2,525,422 shares. This is an increase as per their last 13F filing they owned 945,000 shares as of September 30th, 2009. Over the the last two and a half months, Farallon has added 1,580,422 shares, a 167% increase.

For more recent activity out of Farallon head to our post on their portfolio and internal firm adjustments. Thomas Steyer founded Farallon in 1986 and today it is a multi-billion dollar hedge fund that typically invests in equities, private investments, debt, and real estate. They are one of the 40+ prominent hedge funds we keep an eye on in our portfolio tracking series so head over there to see what other hedgies have been up to.

Taken from Google Finance, Beacon Roofing Supply is "a distributor of residential and non-residential roofing materials in the United States and Canada. The Company also distributes other complementary building materials, including siding, windows, specialty lumber products and waterproofing systems for residential and nonresidential building exteriors. As of September 30, 2009, Beacon Roofing Supply, Inc. operated 172 branches in 37 states and three Canadian provinces, carrying up to 10,000 stock keeping unit (SKUs) and serving more than 40,000 customers."

Hedge Fund Farallon Capital: Position Update & Internal Adjustments

Due to activity on October 14th, 2009, Thomas Steyer's hedge fund Farallon Capital Management filed an amended 13D on Capitalsource (CSE). They are now showing a 3.9% ownership stake in the company with 12,582,795 shares, which is a decrease from their previous holdings. (As we covered in their previous filings with the SEC, Farallon has been selling CSE shares). Back in late September they owned a 5.7% ownership stake and obviously have since reduced their holdings down to their current 3.9% stake by selling 5,993,546 shares over the past month or so. You can view the rest of Farallon's holdings here, but keep in mind that they are set to update their disclosures here in the next few weeks with a new 13F filing.

We also got some news recently out of Farallon as it pertains to their future. They plan to make co-managing partner Andrew Spokes their 'key man' going forward, enabling a succession plan should Steyer ever depart (he has no plans to leave at this point). If both Steyer and Spokes were to leave, then the funds would be liquidated, giving investors complete transparency as to the firm's operating procedures going forward. Spokes previously was an executive director at Goldman Sachs and oversaw portfolio management for Noonday Global Management, a Farallon affiliate.

Farallon is a multi-billion dollar hedge fund founded by Thomas Steyer in 1986 that typically invests in equities, private investments, debt, and real estate. While they have a solid track record, 2008 was definitely a chink in the armor. After receiving redemption requests for almost 25% of their main fund's capital, they suspended withdrawals. Their poor 2008 also landed them on the dreaded list of the top 10 asset losers. Read more about Farallon in our post covering their background and positions.

Taken from Google Finance, Capitalsource is "a commercial lender that provides financial products to middle market businesses. Through its wholly owned subsidiary, CapitalSource Bank, the Company provides depository products and services in southern and central California. It operates through three segments. The Commercial Banking segment comprises the Company’s commercial lending and banking business activities. The Healthcare Net Lease segment comprises its direct real estate investment business activities. The Residential Mortgage Investment segment comprises the Company’s remaining residential mortgage investment and other investment activities, in which it formerly engaged to optimize its qualification as a real estate investment trust."

Hedge Fund Farallon Files 13G On Energy Partners (EPL)

Wednesday after market close, Thomas Steyer's hedge fund Farallon Capital filed a 13G on Energy Partners (EPL). In it, they have disclosed a 12.3% ownership stake with 4,903,423 shares. The filing was made due to activity on September 21st, 2009 and this is a brand new equity position for them. They did not hold an equity position in Energy Partners back on June 30th when Farallon disclosed their portfolio in their 13F filing. However, it is extremely likely that Farallon held senior notes that were converted into equity recently as EPL emerged from Chapter 11. While we can't be 100% certain of that, it is the most logical explanation as numerous other hedge funds have disclosed similar 13G's on the same date, implying that they all took part in the equity conversion a few days ago. This action comes right after we saw Steyer's hedge fund adjust their Capitalsource (CSE) position yesterday.

Farallon is a $1.5+ billion hedge fund founded by Thomas Steyer in 1986. They usually invest in equities, private investments, debt, and real estate. While they have a solid track record, 2008 was definitely a chink in the armor. After receiving redemption requests for almost 25% of their main fund's capital, they suspended withdrawals. Their poor 2008 also put them on the dreaded list of the top 10 asset losers. Read more about Farallon in our post about their background and positions.

Taken from Google Finance, Energy Partners is "an independent oil and natural gas exploration and production company. As of December 31, 2008, the Company had estimated proved reserves of approximately 90.8 billion cubic feet (Bcf) of natural gas and 21.6 million barrels (Mmbbls) of oil, or an aggregate of approximately 36.8 million barrels of oil equivalent (Mmboe). The Company’s operations are concentrated in the shallow to moderate-depth waters in the Gulf of Mexico focusing on the areas offshore Louisiana, as well as the deepwater Gulf of Mexico at depths less than 5,000 feet."

Thomas Steyer's Farallon Sells Capitalsource (CSE) Shares

In an amended 13D filed with the SEC after the close yesterday, Thomas Steyer's hedge fund Farallon Capital has updated their stake in Capitalsource (CSE). The filing was made due to activity on September 17th, 2009 and they now show a 5.7% ownership stake with 18,576,341 shares. This is down from their previous stake as they have sold 8,084,981 shares (or about 2.5% of their ownership stake) since August 14th of this year. While we don't like to speculate as to why a fund might be selling a particular security, it wouldn't be out of the ordinary for them to solely be locking in some profits here as the stock has enjoyed quite a healthy run. CSE is interesting because as we've noted in the past, fellow prominent hedge fund player Seth Klarman has invested a lot of his Baupost Group's cash into Capitalsource as well. We'll continue to watch their movement in this name. In terms of other notable activity, we also saw Farallon update their position in Global Gold (GBGD). Additionally, head over to our post to check out the rest of Farallon's portfolio.

Farallon is a multi-billion hedge fund founded by Thomas Steyer in 1986. They usually invest in equities, private investments, debt, and real estate. While they have a solid track record, 2008 was definitely a chink in the armor. After receiving redemption requests for almost 25% of their main fund's capital, they suspended withdrawals. Their poor 2008 also put them on the dreaded list of the top 10 asset losers.

Taken from Google Finance, Capitalsource is "a commercial lender that provides financial products to middle market businesses. Through its wholly owned subsidiary, CapitalSource Bank, the Company provides depository products and services in southern and central California. It operates through three segments. The Commercial Banking segment comprises the Company’s commercial lending and banking business activities. The Healthcare Net Lease segment comprises its direct real estate investment business activities. The Residential Mortgage Investment segment comprises the Company’s remaining residential mortgage investment and other investment activities, in which it formerly engaged to optimize its qualification as a real estate investment trust."