A Look at Ken Griffin (Citadel), Dan Loeb (Third Point), and Eric Bolling (Notable Trader)

- Fortune has an excellent interview with Ken Griffin & play-by-play of the recent troubles at Citadel.

- Background on Eric Bolling, whose commentary we have featured often on the blog (recently here and here).

- A look at Third Point hedge fund manager Dan Loeb. Also, you can now rent his plane. (We recently looked at his portfolio here).

Hedge Fund Tracking: Daniel Loeb's Third Point - 13F Filing Q3 2008

This is the 3rd Quarter 2008 edition of our ongoing hedge fund tracking series. Before reading this update, make sure you check out the preface to the series we're doing on Hedge Fund 13F's here. We've already covered Timothy Barakett's Atticus Capital,Whitney Tilson's T2 Partners, Peter Thiel's Clarium Capital, Bill Ackman's Pershing Square, Bret Barakett's Tremblant Capital, John Paulson's Paulson & Co, and David Einhorn's Greenlight Capital. We've also already covered a few of the 'Tiger Cub' portfolios in our hedge fund tracking series, including Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, and John Griffin's Blue Ridge Capital, and Andreas Halvorsen's Viking Global. Next up, we have Daniel Loeb's Third Point LLC. Third Point is a $4.5 billion activist and value based hedge fund. While Third Point is technically an activist fund, Loeb often has numerous passive investments as well. Loeb's firm was -10.3% for October and is now -26.9% year-to-date, which we noted in our October hedge fund performance update. Before beginning, its probably worthwhile to see Third Point's 2nd quarter portfolio update, so you can get a sense as to what positions they're building as core holdings.

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


New Positions (Brand new positions that they initiated in the last quarter):
Dr Pepper Snapple (DPS)
Lorillard (LO)
Anheuser Busch (BUD)
Rohm & Haas (ROH)
CVS Caremark (CVS)
Hewlett Packard (HPQ)
Wendys (WEN)
Epicor Software (EPIC)
UST (UST)
Verigy (VRGY)
Dineequity (DIN)
Merrill Lynch (MER)
Heckmann Corp WTS (HEK-WS)
Epicor Software Corp (EPIC) 2.375% Note 5/1
Heckmann Corp (HEK)
Amedisys Inc (AMED) Puts
EDCI Holdings (EDCI)
Stream Global (OOO-WS)
JB Hunt (JBHT)
Avi Biopharma (AVII)
Citigroup (C) Puts


Added to (Positions they already owned but added shares to)
Orient Express Hotels (OEH): Increased by 242%
Telephone and Data (TDS): Increased by 168%
Tibco Software (TIBX): Increased by 103%
Teradata (TDC): Increased by 74%
Phoenix Companies (PNX): Increased by 58%
Exco Resources (XCO): Increased by 49%
Target (TGT): Increased by 19%


Some Reduced Positions (Positions they sold some shares of - note not all sales listed)
Covidien (COV): Reduced position by 67%
Enpro (NPO): Reduced position by 55%
Plains Exploration (PXP): Reduced position by 44%
Time Warner (TWX): Reduced position by 44%
Meadwestvaco (MWV): Reduced position by 42%
GLG Partners (GLG): Reduced position by 36%
American Eagle Outfitters (AEO): Reduced position by 35%
Leap Wireless (LEAP): Reduced position by 31%
Flow International (FLOW): Reduced position by 15.6%


Removed Positions (Positions they sold out of completely)
Mastercard (MA)
Clear Channel (CCO)
Questar (STR)
Microsoft (MSFT)
BHP Billiton (BHP)
Energy XXI (EXXI)
Public Service Enterprise (PEG)
AK Steel (AKS)
Sandridge (SD)
St Mary Land & Exploration (SM)
Petrohawk (HK)
Chesapeake (CHK)
Cabot (COG)
Canadian Natural Resources (CNQ)
Petroleo Brasileiro (PBR)
Horsehead (ZINC)
Safeway (SWY)
Global BPO Services Corp (OOO.U)
Comstock (CRK)
XTO Energy (XTO)
Starwood (HOT)
Orion Marine (OMGI)
American Superconductor (AMSC)
Sirf Technology (SIRF)
Motorcar Parts (MPAA)
Abraxas Petroleum (AXAS)
Nustar Group (NSH)
Loral Space and Comm (LORL)
Entertainment Dist Co
Massey Energy (MEE)


Top 20 Holdings (by % of portfolio)

1. Exco (XCO): 6.6% of portfolio
2. Dr Pepper Snapple (DPS): 5.4% of portfolio
3. Phoenix Companies (PNX): 5% of portfolio
4. Plains Exploration (PXP): 4.9% of portfolio
5. Lorillard (LO): 4.7% of portfolio
6. Teradata (TDC): 4.7% of portfolio
7. Leap Wireless (LEAP): 4.1% of portfolio
8. Time Warner (TWX): 3.8% of portfolio
9. Tibco Software (TIBX): 3.3% of portfolio
10. SPDR S&P 500 (SPY): 3.2% of portfolio
11. Anheuser Busch (BUD): 3.1% of portfolio
12. Telephone and Data (TDS): 3% of portfolio
13. American Eagle (AEO): 3% of portfolio
14. Rohm & Haas (ROH): 2.96% of portfolio
15. Liberty Acq Holdings (LIA-U): 2.95% of portfolio
16. Thompson Creek Metals (TC): 2.5% of portfolio
17. Orient Express Hotels (OEH): 2.2% of portfolio
18. Meadwestvaco (MWV): 2% of portfolio
19. CVS Caremark (CVS): 2% of portfolio
20. Nabi Biopharma (NABI): 1.9% of portfolio

Assets from the collective holdings above were $3.89 billion last quarter and were $1.66 billion this quarter. Numerous funds we track are now showing holdings in Lorillard (LO), including Lone Pine Capital and Maverick Capital. Additionally, Third Point is now the third value oriented fund we've seen in Teradata (TDC). Stephen Mandel's Lone Pine has a sizable position in TDC, as does David Einhorn's Greenlight Capital. Another point of interest is Loeb selling completely out of Mastercard (MA), while legendary investor Julian Robertson was recently buying MA. Lastly, Loeb joins hedge fund Paulson & Co in arbitrage plays such as ROH and BUD. Please note that we have not detailed every single change to every single position in this update, but we have covered all the major moves. Also, keep in mind that these filings only include long equity, notes, and options holdings and do not reflect the cash or short portions of their portfolio. This is just one of many funds in 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, Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, Timothy Barakett's Atticus Capital, John Griffin's Blue Ridge Capital, Bret Barakett's Tremblant Capital, Andreas Halvorsen's Viking Global, John Paulson's Paulson & Co and David Einhorn's Greenlight Capital. 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.

More on Loeb & Third Point:
- Third Point's 2nd quarter portfolio update
- October hedge fund performance update
- Hedge Fund Rankings

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

Checking In On Daniel Loeb's Third Point LLC

As I mentioned earlier, I like to track a variety of hedge funds with different strategies just to see what everyone is up to each quarter. And, while I don't necessarily go in-depth on each fund, I do like to monitor major changes to their portfolios. In addition to tracking activist fund Greenlight Capital managed by David Einhorn (which I wrote about here), I also like to track the activist exploits of Daniel Loeb. Loeb runs Third Point LLC, a $4.5 billion activist hedge fund. While Third Point is technically an activist fund, Loeb often has numerous passive investments as well.

So, after comparing his most recent 13F filing with the one from last quarter, we can see a few major moves that Loeb has made with Third Point's portfolio. Please note that this is by no means a complete summary of changes. I am simply pointing out a few changes of interest.

New Positions:
American Superconductor (AMSC)
Chesapeak Energy (CHK)
Petrohawk Energy (HK)
Petroleo Brasileiro (PBR)
Sandridge Energy (SD)
Starwood Hotels (HOT)
Teradata (TDC)
XTO Energy (XTO)

Added to:
AK Steel (AKS)
American Eagle Outfitters (AEO)
Leap Wireless (LEAP)
Plains Exploration (PXP)

Reduced Positions:
GLG Partners (GLG)
Mastercard (MA)
Safeway (SWY)

Removed Positions (positions Loeb sold out of completely):
Applied Biosystems (ABI)
Chipotle (CMG)
Cypress Semiconductor (CY)
Mylan (MYL)


Some of Third Point's top holdings (in no particular order) include: Plains Exporation (PXP), Questar (STR), Mastercard (MA), Clear Channel (CCU), and Microsoft (MSFT).

Again, please note that this is merely some highlights of their portfolio and does not detail all of the changes made. If you're interested in more in-depth analysis of some hedge fund portfolios, check out some of the write-ups I've done on the blog (Blue Ridge Capital, Lone Pine Capital, & many more). And, if you're interested in every position Loeb held as of June 30th, you can view Third Point's entire recent 13F as filed with the SEC here.