Moore Capital Reveal New Position in Monitise

Louis Bacon's global macro hedge fund firm Moore Capital Management has disclosed a new position in UK holding company Monitise (LON: MONI). 

Moore now hold 3.28% of Monitise's voting rights (or equivalent).  At first sight, we thought that Moore had bought their holding via the recent placing held on December 3rd.  However, closer inspection of the notification of holdings document shows that their stake is held completely via contracts for difference (explanation of CFDs here).

Per Google Finance, Monitise is "a United Kingdom-based holding company. The principal  activity of the Company is as a technology company delivering mobile banking, payments and  commerce networks worldwide. The Company’s segments include Live Operations, Investment in  future operations and Investment in technology platform. Live operations include both territory  deployments and development contracts, which consist of Monitise United Kingdom, Monitise  Americas and Global accounts. Investment in future operations segment represents the Company’s  operations which are not live operations covering both pre-sales and start-up period. Investment in  technology platform segment comprises the ongoing development, enhancement and maintenance  costs of the Monitise technology platform."


Moore's Other UK Positions 

Moore Capital Management's other disclosed holdings in UK markets which are greater than 3% of voting rights are as follows:

Brightside Group 8.21%
Camper and Nicolsons Marina 5.81%
Helphire Group 5.06%
Loudwater Trust 9.84%
Max Property Group 4.55%
NBNK Investments 8.76%
NewRiver Retail 3.93%

The hedge fund currently has not disclosed any short positions in the UK market.  We recently posted up a list of hedge fund short positions in European markets.

For more on the history of Louis Bacon's hedge fund, head to one of Moore Capital's 2010 letters.

Top 10 Hedge Funds By Net Gains Since Inception

Bloomberg is out with an interesting piece examining the top 10 hedge funds by net gains since inception. The list contains the who's who among the hedge fund elite and is pretty much who you'd expect to be on it.

The data was compiled by LCH Investments NV (part of the Edmond de Rothschild Group) and is based on audited reports from each investment firm, discussions with the funds, as well as confidential sources.


Top 10 Hedge Funds By Net Gains Since Inception

1. Ray Dalio's Bridgewater PureAlpha: $35.8 billion net gain since 1975
2. George Soros' Quantum Endowment: $31.2 bn net gain since 1973
3. John Paulson's Paulson & Co: $22.6 bn net gain since 1994
4. Seth Klarman's Baupost Group: $16 bn net gain since 1983
5. Brevan Howard: $15.7 bn net gain since 2003
6. David Tepper's Appaloosa Management: $13.7 bn net gain since 1993
7. Bruce Kovner's Caxton Associates: $13.1 bn net gain since 1983
8. Louis Bacon's Moore Capital: $12.7 bn net gain since 1990
9. Thomas Steyer's Farallon Capital: $12.2 bn net gain since 1987
10. Steve Cohen's SAC Capital: $12.2 bn net gain since 1992


One interesting tidbit here is that Louis Bacon's Moore Capital makes the top ten, but his mentor Paul Tudor Jones (Tudor Investment Corp) does not. Tudor was largely responsible for seeding Bacon's fund by sending him investors that Tudor had to turn away back when he was first getting started.

Compare the above to the top 10 biggest hedge funds in 2010 and it's no surprise that there's considerable overlap as some of the most successful hedge funds have become some of the largest. Also, the two funds that have been around the longest on the list (Bridgewater and Soros) are the two that occupy the top positions.

Five of the managers above are featured in our Hedge Fund Wisdom newsletter and you can see their latest investments in our brand new issue.

Hedge Fund Moore Capital Reduce Collins Stewart (LON:CLST) Position

Louis Bacon's hedge fund Moore Capital have reduced their long position in financial advisor Collins Stewart (LON: CLST). Moore's reduction below a 3% ownership stake in the company triggered a regulatory filing with the London Stock Exchange.

We cannot be sure if the hedge fund still owns shares or not, as they are not required to report a position once they breach that 3% threshold to the downside.

Moore could have sold completely out of the position, or they could still hold a long stake in CLST below the 3% level. Unfortunately, this is one of the pitfalls of the UK regulatory disclosure system. In other activity, we also noted Moore Capital reduced its Mecom position.

From Google Finance - "Collins Stewart plc is a United Kingdom-based company. It is an independent financial advisory group servicing corporates, financial institution, private equity houses, private clients, governments and quasi-governmental bodies. The Company's services covers institutional stockbroking, United Kingdom, European and United States research, corporate broking, corporate finance, debt capital markets, restructuring and debt advisory services and private client wealth management."

Moore Capital's flagship Moore Global fund was up 3% last year as noted in our compilation of 2010 hedge fund returns. Its macro managers fund, on the other hand, returned 105%.

Louis Bacon's Moore Capital Reduces Mecom Position

Louis Bacon's global macro hedge fund firm Moore Capital Management recently disclosed an update to their position in Mecom (LON: MEC). Due to trading on January 7th, Moore has reduced its position to 3.55% of shares outstanding. This change was reported in a filing with UK regulators.

This is down from Moore's previous 4.45% stake in the publisher as Moore originally started a new position in MEC back in November of last year.

Per Google Finance, Mecom is "engaged in the operation of content and consumer businesses in Europe. The Company owns over 300 printed titles and over 200 Websites in its four divisions, with operations in the Netherlands, Denmark, Norway and Poland."

You can scroll through all our coverage of hedge fund positions in the UK here.

Louis Bacon's Moore Capital Starts New Position in Mecom (LON: MEC)

Louis Bacon’s Moore European Capital has opened a new position in publisher, Mecom (LON: MEC). Due to trading on the 16th of November, Moore now control the voting rights of over 5,039,870 shares or 4.45% of outstanding shares. This is not the only position that Moore European Capital have opened recently via the London market. They also started a new position in Collins Stewart (LON: CLST), a financial advisor.

Regarding other recent positions hedge funds have taken in UK markets, we detailed how Larry Robbins' Glenview Capital increased its Punch Taverns (PUB) position and that Odey Asset Management disclosed a short position in Provident Financial (PFG).

Taken from Google Finance – “Mecom Group plc (Mecom) is engaged in the operation of content and consumer businesses in Europe. The Company owns over 300 printed titles and over 200 Websites in its four divisions, with operations in the Netherlands, Denmark, Norway and Poland."

Louis Bacon's Moore Capital Starts New Collins Stewart Position

Louis Bacon's global macro hedge fund Moore Capital Management has disclosed a new position in Collins Stewart (LON: CLST) traded in UK markets. Due to trading on the 2nd of November, Moore now holds 3.29% of CLST's shares outstanding. It must also be noted that Bacon's entire position has been acquired via the Contract For Difference market (CFDs). If you're unfamiliar with this instrument, we've penned a primer on CFDs here.

Though we haven't seen their investor letters as of late, we detailed Moore's first quarter letter here for those interested. Moore is one of the premier global macro funds out there as Bacon has been fixated on risk management as the path to success.

Regarding other hedge fund activity in UK markets, we just posted up that Larry Robbins' Glenview Capital raised its stake in Punch Taverns (PUB) and that Odey Asset Management disclosed a short position in Provident Financial (PFG).

Taken from Google Finance, Collins Stewart plc is "a United Kingdom-based company. It is an independent financial advisory group servicing corporates, financial institution, private equity houses, private clients, governments and quasi-governmental bodies.

The Company's services covers institutional stockbroking, United Kingdom, European and United States research, corporate broking, corporate finance, debt capital markets, restructuring and debt advisory services and private client wealth management. The Company has four operating divisions: Wealth Management, Securities, Corporate Broking and Advisory. Wealth Management is a portfolio manager and stockbroker with a focus on administering assets. The Securities division offers a research, sales and execution service to institutional clients across Europe and North America. It is a distributor of small and mid-cap equity, both primary and secondary, and specializes in raising such capital. Its corporate advisory firm Hawkpoint, provides advisory services."

Find out what other foreign positions hedge funds have moved into with our coverage of UK markets.

Louis Bacon's Hedge Fund Moore Capital: Return to a Bear Market? (Investor Letter)

Today we present you with the first quarter 2010 investor letter from hedge fund Moore Capital. Louis Bacon's commentary details the 20 year history of his hedge fund and provides an update as to the current financial market landscape. Moore Capital is of course one of the most prominent hedge funds out there and Louis Bacon recently appeared on Forbes billionaire list. It's been a while since we covered this global macro hedge fund giant, but we previously detailed how Moore added to an insurance play in their portfolio.

Moore's Remington Investment Strategies fund was up 21.58% for 2009 and was up 2.3% for the first quarter in 2010. We noted last month that thus far in 2010, global macro funds have lagged. Moore's Global fund was up 20.6% for 2009 as outlined in our list of hedge fund performance numbers. Outlining today's risks for hedge funds, Bacon feels that there are two major headwinds: investor risk and regulatory risk. But first, we'll outline his stance on the markets.

Market Risk

Moore Capital has been playing the cyclical economic bounce caused by the inventory cycle and various stimulus packages. Bacon then goes on to write, "I expect there are a number of positives in the markets and economies that will start to turn retrograde and we should see a resumption of a bearish market amid the secular softening of U.S. economic might. Markets could well be worrying about 'stall speed' by the end of the year."

He also made it clear that there are a large number of uncertainties out there right now and that he is wary of committing long-term capital. However, he sees ripe opportunity for global macro trading as there are divergences a plenty within the global investment landscape as each country and region deals with fiscal and monetary reactions to the crisis. Focusing specifically on Europe, Bacon sees "long-term disastrous consequences for the (European) Union and Europe."

Investor Risk

Focusing next on investor risk, Bacon prudently notes that, "There are times an almost unlimited amount of assets can be put to work - as in the second half of 2009 - but these are normally the times that the flow of clients' funds are redeeming, as happened last year." Moore Capital only saw limited losses in 2008 (down only 4.8%) as they did a good job of protecting investors compared to most hedge funds. However, in a time where everyone seemingly needed liquidity, even those with solid performance were hit by redemptions. For 2010, Bacon feels like the investment landscape is more divided and highlights that Moore proprietary capital represents by far their largest investor. He feels they've made successful adjustments in order to mitigate the risk of investors fleeing en masse should a liquidity crisis occur again in the future.

Regulatory Risk

Turning to regulatory risk, Bacon focuses on the increasing divergence between the US and European financial systems. The US has been reducing systemic risk while 'too big to fail' money-center banks have now become 'too big to bail out.' While increased regulation regarding hedge funds in the US seems inevitable, Bacon thinks it will be 'on the benign side.' Conversely in Europe, legislation is being proposed that could decidedly shift the alternative asset management industry.

Bacon then turns the topic of his letter to an insightful archive of his firm's past. For the entirety of Moore's 20 year history, we defer to the investor letter itself. However, we wanted to point out two intriguing lessons that Bacon learned in 1994, his fund's worst year. Bacon learned that, "a huge positive year does not absolve you of the collateral damage of much smaller losses in the following; being right in the long run, making money, and surviving can be exclusive and non-reinforcing outcomes."

Embedded below is Louis Bacon's latest market commentary from Moore Capital's first quarter investor letter:



You can download a .pdf here.

A great historical look at one of the most prominent global macro hedge funds in the game. We're always fascinated with the wide range of reasons as to how hedge funds are named, so we'll leave you with the origination of Moore Capital Management directly from Bacon himself. "The Moore moniker was arrived at partly due to my brother, Zack Bacon, having already taken up the Bacon name in his company and to another of my mentors, Paul Jones, who used his middle name - Tudor - for his own company. And 'Moore' acknowledged my mother's name in that my slim inheritance from her of some $25,000 was the genesis of my track record around which I raised my first fund."

It's a rare treat to see Bacon's insight and clearly the investment landscape is littered with opportunity on both the long and short sides in numerous asset classes. His fund has generated obscenely good performance so when Mr. Bacon talks, you listen (or in this case, read). We've covered numerous other prominent hedge fund investor letters as of late and we also highly recommend reading Ricky Sandler's letter (Eminence Capital), the latest letter from David Einhorn's Greenlight Capital, as well as Jay Petschek's latest commentary from Corsair Capital.

Moore Capital Raided By FSA in the UK

One of the biggest stories today has been the fact that Louis Bacon's hedge fund firm Moore Capital was raided earlier by the Financial Services Authority (FSA) in the United Kingdom. An employee at Moore Capital has been arrested, but no one has been charged. Robert Peston over at BBC has noted that, "Moore Capital's understanding is that the FSA is probing private dealings by the trader, rather than trades for the firm." According to Bloomberg, Moore's equity execution trader Julian Rifat was the individual searched. Apparently, an individual at Deutsche Bank and an individual at the London office of BNP Paribas are also under investigation.

According to the FSA press release, "It is believed that the city professionals passed inside information to traders (either directly or via middlemen) who traded based on this information and have made significant profits as a result." Apparently the joint investigation began back in late 2007. Their release calls this the first operation where 16 addresses were searched today.

So for now, it appears as though the individuals are under investigation for their own private transactions and that the firms themselves are not under investigation. It will certainly be interesting to watch as it unfolds. Moore Capital's name has now been tossed into the negative spotlight with all of these headlines though. Remember that last year another high profile hedgie, Raj Rajaratnam's Galleon Group was also accused of insider trading last year.

Moore Capital's founder Louis Bacon is of course one of the most prominent global macro managers out there and was recently featured on Forbes' billionaire list. For more on Bacon's hedge fund, we've posted up some recent portfolio activity out of Moore, as well as some of their UK positions. We'll continue to follow developments in this new insider trading case.

Louis Bacon's Hedge Fund Moore Capital Adds To Insurance Plays

We're back with an update in our hedge fund UK holdings series and this time we're focusing on Louis Bacon's hedge fund firm Moore Capital Management. A few days ago, the London Stock Exchange announced that Moore Capital Management held 22,750,000 shares in Insurance Broker Brightside Group (LSE: BRT), or 5.5% of the company's outstanding equity. This is a brand new position for Moore. Recently, we also saw that Moore increased its holding in another UK listed insurance operator. In December 2009, Louis Bacon's hedge fund firm increased their holdings in Lancashire Holdings (LSE: LRE) from a 4% to a 5% ownership stake. They now own 8,604,520 shares. We've previously covered the rest of Moore's UK positions as well.

This past year, Moore Capital's global fund was up 20.6% as noted in our 2009 hedge fund performance numbers post. Louis Bacon comes from the legendary Commodities Corp and is one of their 'offspring' along with Paul Tudor Jones and Bruce Kovner. Moore Capital is a $10 billion global macro set of hedge funds bearing Bacon's middle name. He is a well-known trader and more importantly, a risk manager.

Bacon actually got his firm started with help from Paul Tudor Jones. When Jones stopped accepting capital for his hedge fund, he turned investors to Bacon's firm. In the past, we had seen figures that Bacon had returned 30% annually since inception in 1990. He is notable because his returns often have low volatility and a low correlation to the stock market. In Barron's 2009 hedge fund rankings, Moore came in at #33 out of 100.

Bacon learned his risk management skills at an early age in the futures markets. Whlie getting his MBA at Columbia, he used his student loan money to trade and lost it all. Clearly, he learned a lesson he would never forget. Such a large mistake has made him an impeccable risk manager. After starting his own firm, he returned 86% in his first year. He likes to identify long-term macro trends and will trade around the position in the short-term. We'll continue to pass along portfolio developments as they surface. In the mean time, you can view the rest of Moore's UK positions here.

Taken From Google Finance - "Brightside Group plc, through its subsidiaries, provides insurance broking, the provision of premium finance, the provision of medical reports, lead generation and the provision of debt management solutions. The Company operates in four segments: insurance broking; finance provider; medical reporting; and lead generation and debt management. Some of the Company's subsidiaries include Brightside Holdings Limited, David & Co. Consultants Limited, Aust Holdings Limited, Minibus Direct Limited, Group Direct Broking Limited, E Group Limited and Commercial Vehicle Direct Insurance Services Limited."

Hedge Fund Moore Capital Management's UK Positions

Moore Capital Management’s London Listed Holdings

Thanks to a reader's help, we're now cruising along nicely in our hedge fund portfolio tracking series: UK holdings edition. We've already covered Lone Pine Capital's UK positions, Lone Pine's recent movements, Sprott Asset Management's defensive UK portfolio, as well as Citadel's positions. Today we’re going to take a look at the UK holdings of legendary macro investor, Louis Bacon. In particular, we will focus on those investments that Bacon has made through the London Stock Exchange (LSE) and London’s Alternative Investment Market (AIM). Before proceeding, we recommend checking out our informational preface on tracking a hedge fund's UK positions. And now, onto the good stuff:

Bacon lives in London and in a recent interview with Absolute Return and Alpha he said that living in London gave him a broader perspective on a variety of countries. He also noted that the London time zone allows him to be well prepared for the US trading day. Bacon’s flagship investment vehicle is the Moore Macro Fund but he also operates the more regionally focused and smaller, Moore Europe Capital Management. In April of last year, Bacon hired talented portfolio manager Greg Coffey to become Chief Investment Officer of Moore Europe. Coffey had previously worked at London based hedge fund GLG, and brought a team of 12 with him to Moore. Reports at the time speculated that whilst at GLG Coffey had been responsible for 60% of GLG’s performance.

As well as his outstanding returns, Bacon is renowned for his risk management. He has animal-like instinct for sensing turns in the market and an itchy trigger-finger that sometimes leads him to trade in and out and around positions, even when they are moving in the predicted direction. While others might see a mountain top in the distance, Bacon notices the valley en route to getting there. Other traders and managers might ride out that valley while waiting for the mountain top. Not Bacon. Instead, he'll trade in and out of positions in order to make money in the short-term while navigating toward the long-term thesis.

Now, let's dive right into Moore's UK regulatory disclosures. There are a couple of interesting patterns in Moore’s UK holdings that we want to touch on. Firstly, six out of seven of their positions are in investment funds or insurance companies where investment and actuarial acumen determine success to a large extent (Helphire Group Plc is the only exception). Moore’s approach here seems to be to try pick out talented managers in specific niches with good track records at the right price.

Secondly, we also noted that five of the seven holdings are registered and incorporated in off-shore locations such as Jersey, Guernsey, Isle of Man and Bermuda. Of course, these locations convey lighter tax and regulation than the UK mainland. What is more difficult to determine is whether these advantages are priced into the stock price. The large number of off-shore holdings in Moore’s portfolio possibly suggests that they don’t think so.

As we mentioned earlier, Louis Bacon is well known for trading. Yet, there is little sign of the famous itchy finger in the filings below. At first sight, Moore Capital appears to have built up their UK positions steadily and in turn sold them in similar fashion. Turnover has been low and their investment style looks to be surprisingly conservative (at least with regards to these positions). As always, keep in mind this is only one tiny piece of their overall portfolio and they are a true global macro hedge fund. In regards to these specific positions though, we wonder if it is possible that Moore have been using CFDs and other derivatives to trade around and hedge the equity positions? When going through Moore’s filings, we only found one CFD position and that was in Helphire Group Plc in early June 2009. Helphire Plc, however, is the only UK mainland incorporated company and is therefore covered by the new rules on CFD disclosure that came into action on June 1 2009. (See our article on the implications of the CFD rule change for hedge fund disclosure in the UK). One of the weaknesses in these new rules is that they only apply to UK mainland companies and not those registered off-shore. So, we have no idea whether Moore have been using CFDs in six out of seven of their holdings. Their holdings are listed below:

Camper and Nicholsons Marina Investments Ltd	date	No. shares	% of issued stock	Estimate of price
(AIM: CMI)	29/01/2007	3500000	7	na
	02/11/2007	3200000	6.4	67p
	22/12/2008	3150000	5.81	22p

Camper & Nicholsons Marina Investments Limited (CNMI) is a closed-ended investment company. It is an off shore fund that is registered and incorporated in Guernsey. CNMI listed on AIM in January 2007 and raised money for the acquisition, development and operation of an international portfolio of marinas and related real estate in the Mediterranean, the Caribbean and the United States. CNMI regards the marina market as highly fragmented, undervalued and ripe for consolidation.

Trading Emissions Plc	23/01/2009	41410948	15.31	na
(AIM: TRE)	03/06/2009	35148218	13.78	95p
	04/06/2009	36388718	14.26	97p
	15/06/2009	38415718	15.1	102p

Trading Emissions PLC is an investment fund that invests in tradable environmental instruments. It is an off shore fund and was registered in the Isle of Man in 2005. Moore has been a long-term holder of TRE stock. They purchased 20,000,000 shares in the company in 2005, probably on issue. The Company is managed to be long only in environmental commodities with a view that these commodities will appreciate in value. The core of the portfolio is a long position in carbon assets. The Company is also involved in aggregation, monetization, and collateralization in the carbon market. This is interesting because in an interesting piece on Goldman Sachs, writer Matt Taibbi hypothesized that Goldman's next big 'bubble' was the carbon market. Moore could very well agree with this given their investment. The company’s fund manager is EEA Fund Management Limited an investment advisory firm based in the City of London. EEA is also advisor to Climate Exchange PLC, another investment company listed on AIM.

Omega Insurance Holdings Ltd	22/01/2009	11635362	7.87	na
(AIM: OIH)	14/04/2009	9544963	3.97	139p
	17/06/2009	10445875	4.33	128p
	21/08/2009	9398416	3.86	134p

Omega Insurance Holdings is an insurance underwriting company. It is listed on the AIM market and is registered and incorporated off shore in Bermuda. The majority of the Omega Group’s premium income is derived from its business operations in the United States. The companies in the Group focus predominantly on short-tail property insurance and reinsurance which they provide to small to medium-sized insurance companies. The company is most active in property insurance but it is also involved in motor insurance and professional indemnity insurance.

Juridica Inv Ltd (AIM: JIL)

11/03/2009

3719999

4.65

na

Juridica Investments Limited is an investment company registered off shore in Guernsey which seeks to invest in a new asset class: litigation funding. It trades on AIM and was listed in late 2007. Juridica provides third-party litigation funding to law firms seeking capital for expensive litigation cases. Juridica aim to back those claims that statistically are likely to be won.

Helphire Group Plc	01/06/2009	15874400	4.79	na
(LSE: HHR)	17/06/2009	16561123	5	na
	26/08/2009	16293953	4.92	na

Helphire Group plc is a United Kingdom-based company that provides assistance to vehicle owners who have been involved in road accidents. The Company's main revenue is derived from replacement vehicle hire and the financing of vehicle repairs arising from insurance claims. The Company employs 2,600 people across six sites and operates a national branch network of 30 depots. It has a fleet of over 17,000 vehicles.

Max Property Group Plc (AIM: MAX)

17/06/2009

10000000

4.55

100p

Max Property was admitted to the AIM in May 2009. It is likely that Moore purchased shares at the initial public offering @ 100p. Max Property Group Plc is an off shore, closed-end real estate investment company incorporated in Jersey. The company has an experienced board and is externally managed by Prestbury Investments. The company is aiming to exploit the current cyclical weakness in the UK real estate market through investment and active management with a view to realizing cash returns for shareholders over an investment cycle of approximately seven and half years. Hedge fund Och-Ziff owns 15.9% of Max’s shares.

Chaucer Holdings Plc	13/02/2009	4999990	1.44	na
(FTSE: CHU)	27/02/2009	20671722	3.77	43
	09/03/2009	25019347	4.56	38
	11/03/2009	27119347	4.95	40
	07/04/2009	28990072	5.29	39
	09/04/2009	29333460	5.35	40
	28/04/2009	29133460	5.32	42
	05/05/2009	28633460	5.22	41
	21/07/2009	25631976	4.68	43.7
	26/08/2009	25786746	4.7	45
	01/09/2009	26036746	4.75	45.4
	08/09/2009	21095740	3.85	49

Chaucer is a specialist insurance and reinsurance underwriter. Their Lloyd’s Syndicates 1084 and 1176 provide the main focus of the business. Chaucer Syndicate 1084 accepts risks across international aviation, marine, energy, property and specialist lines markets and the UK motor market. Nuclear Syndicate 1176 is one of the leading insurers of nuclear risk.

That concludes the coverage of Louis Bacon's Moore Capital Management, for now at least. As always, we'll continue to provide updates as they filter in through various regulatory filings. If you're interested in positions other prominent hedge funds hold in UK markets, check out our articles on Lone Pine Capital's UK holdings, Lone Pine's recent movements, Sprott Asset Management's defensive UK portfolio, as well as Citadel's positions. While we haven't yet covered Moore's US holdings in our portfolio tracking series, we have covered their previous positions in the past for those interested.

Louis Bacon's Moore Capital Management Bets On Energy: 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.

This week is 'global macro week' here at Market Folly and we'll be covering some of the equity positions of the major global macro strategy hedge funds. We want to start off this week with a slight disclaimer. Since global macro funds trade all different types of asset classes, they're not an ideal bunch to track or to clone a portfolio from. However, they are some of the smartest minds out there in terms of secular themes, trading, and market timing. As such, we monitor their movements in equities to get a sense as to what sectors they like, when they're moving out of long equity positions, and to see if we can see any secular themes they might be playing. So, this week is not so much about tracking as much as it is about taking a step back and observing the 'bigger picture.'

We've already covered Paul Tudor Jones' hedge fund, and next up we've got Louis Bacon's Moore Capital Management. Louis Bacon comes from the group of "offspring" of the legendary Commodities Corporation. Moore emerged as a successful offspring along with fellow great macro traders Bruce Kovner (Caxton Associates) and Paul Tudor Jones (Tudor Investment Corp). Moore, named after Bacon's middle name, is a $10 billion global macro set of hedge funds. Louis Bacon is a famed trader and risk manager. And, interestingly enough, Bacon helped get his firm off the ground when Paul Tudor Jones stopped accepting capital from investors and instead turned them to Bacon's firm. Returning 31% annually since inception in 1990, Bacon can be very proud of his flagship fund, Moore Global Investments. But, it doesn't stop there. His returns have shown little correlation to the stock market and low volatility. He is the definition of a risk manager. For 2008, their Global Investments fund finished -4.3%, their Global Fixed Income fund finished +1.3%, and their Emerging Markets Fund finished -17.6%, as noted in our comprehensive list of hedge fund performance numbers. In Barron's 2009 hedge fund rankings, Moore came in 33rd out of the top 100.

Bacon credits his risk management skills to the futures markets, where he learned to be sensitive to market action. And, he learned such skills at an early age. While getting his MBA at Columbia, he used his student loan money to trade. And, he lost it all. Clearly, he learned a lesson he would never forget. Such a lesson stuck with him as he worked various jobs in the financial industry before eventually starting his own firm. And, in his first year managing Moore Capital Management, he returned 86%. Bacon strives to identify long running macro trends. While he has a longer-term macroeconomic view, he won't let that stop him from making money by trading around the position in the mean time. If you want to hear some insightful thoughts from Louis Bacon himself, head over to our post on Hedge Fund manager interviews.

Many successful members of Moore have gone on to start their own funds. For instance, we track Bret Barakett's Tremblant Capital, who learned his trade at Moore. Also, its worth pointing out that Stanley Shopkorn, formerly of Moore Capital, has started his own fund. Additionally, we recently learned that Christopher Pia, another Moore alum will be starting his own fund. But, enough about those who have gone on to do their own thing. Let's check out what Moore was up to.

Back in December of 2008, we posted up an interesting piece about how global macro funds were returning to their roots and Moore was prominently featured. It will be interesting to monitor their developments going forward as they were displeased with the complexities of their portfolio. In terms of recent performance, we saw that Moore was up 6.3% for 2009 at the end of May in our 2009 hedge fund performances post. Special thanks goes out to Patrick McGowan for assembling the data for this 13F analysis.

The following were Moore'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):
Wyeth (WYE), United Technologies (UTX), China Mobile (CHL), Metlife (MET), CMS Energy (CMS), Electronic Arts (ERTS) Calls, China Petroleum (SNP), Freeport McMoran (FCX), Emerson Electric (EMR), Monsanto (MON), Genentech (DNA) Puts, Caterpillar (CAT), EMC (EMC), Citrix (CTXS), Walmart (WMT), Activision Blizzard (ATVI), Northeast Utilities (NU), Netapp (NTAP), Riverbed (RVBD) Calls, Wyeth (WYE) Calls, Cummins (CMI), Owens Illinois (OI), Joy Global (JOYG), Schering Plough (SGP), & Hess (HES) Puts


Some Increased Positions (A few positions they already owned but added shares to)
Lorillard (LO): Increased by 606%
Petroleo Brasileiro (PBR-A): Increased by 196%
ACE (ACE): Increased by 178%
Select Sector Energy (XLE): Increased by 133%
Occidental Petroleum (OXY): Increased by 100%
Potash (POT): Increased by 92%


Some Reduced Positions (Some positions they sold some shares of - note not all sales listed)
PS Wilderhill (PBW): Reduced by 70%
Micron (MU): Reduced by 47% but their position is only 0.46% of their portfolio


Removed Positions (Positions they sold out of completely)
Transocean (RIG), Home Depot (HD), Lowes (LOW), State Street (STT), SPDR Homebuilders (XHB), Bristol Myers Squibb (BMY), Electronic Arts (ERTS), AMR (AMR), Continental Airliens (CAL), Philip Morris (PM), Whirlpool (WHR), Delta Airliens (DAL), US Steel (X), Exxon Mobil (XOM), Lennar (LEN), Toll Brothers (TOL), Altria (MO), Shaw Group (SGR), Hewlett Packard (HPQ), Foster Wheeler (FWLT), Stanley Works (SWK), First Solar (FSLR), & Procter & Gamble (PG) Puts.


Top 15 Holdings (by % of portfolio)

1. Select Sector Energy (XLE) Calls: 18.9% of portfolio
2. Select Sector Energy (XLE): 13.3% of portfolio
3. Ace (ACE): 8.7% of portfolio
4. Select Sector Energy (XLE) Puts: 8.1% of portfolio
5. Max Capital (MXGL): 5.1% of portfolio
6. Wyeth (WYE): 3.7% of portfolio
7. Lorillard (LO): 2.77% of portfolio
8. United Technologies (UTX): 2.5% of portfolio
9. China Mobile (CHL): 1.8% of portfolio
10. Metlife (MET): 1.7% of portfolio
11. Powershares Water Resource (PHO): 1.5% of portfolio
12. CMS Energy (CMS): 1.5% of portfolio
13. Electronic Arts (ERTS) Calls: 1.5% of portfolio
14. China Petroleum (SNP): 1.4% of portfolio
15. Freeport McMoran (FCX): 1.3% of portfolio

Moore has placed a pretty hefty bet on the energy sector. While they have hedged some of the position with puts, they have a rather large long bias with 18.9% of the portfolio in XLE Calls and 13.3% of the portfolio in XLE shares for a long exposure of 32.2%. That is quite a large bet, even when taking the hedge into account. Then, when you further look at their portfolio, you also see numerous other energy and natural resource plays scattered throughout such as PBR-A, SNP, MON, POT, and more. It's also interesting to note that they too joined in on the WYE trade last quarter as they try to game the event-driven situation there.

As you can see from the massive amount of new positions they put on and the large amount of positions they completely sold out of, Moore (and most other global macro firms) move in and out of plays in bigger chunks than most other funds we follow. This is the perfect illustration as to why macro funds are not necessarily the best to track or clone portfolios from. At the same time, they can lend us hints as to certain macro themes they are seeing. And, in Moore's case, they have shown us a bias towards energy. This is intriguing because just yesterday Paul Tudor Jones was biased towards the financial sector, although they also had a decent sized position in energy via XLE as well.

Assets from the collective holdings reported to the SEC via 13F filing were $787 million this quarter compared to $821 million last quarter, so a slight decrease in long equity assets. Keep in mind also that Moore's equity exposure is just a sliver of their overall global macro portfolio. They are a multi-billion dollar firm and they do not even have $1 billion in long equities. This is just one of the 40+ prominent funds that we'll be covering in our hedge fund Q1 2009 portfolio series. We've already covered:

- Gurus such as: Soros Fund Management (George Soros), and Jim Rogers.

- 'Tiger Cub' portfolios like: Andreas Halvorsen's Viking Global, Stephen Mandel's Lone Pine Capital, John Griffin's Blue Ridge Capital, Lee Ainslie's Maverick Capital, Shumway Capital Partners (Chris Shumway), Chase Coleman's Tiger Global,

- Outperforming funds like: John Paulson's hedge fund Paulson & Co, Eric Mindich's Eton Park Capital, Raj Rajaratnam's Galleon Group,

- Value and activist funds such as: David Einhorn's Greenlight Capital, Seth Klarman's Baupost Group, Whitney Tison's T2 Partners, Philip Falcone's Harbinger Capital Partners, Ricky Sandler's Eminence Capital,

- Concentrated funds that play secular/macro themes such as: Timothy Barakett's Atticus Capital, Bret Barakett's Tremblant Capital Group, Boone Pickens' BP Capital Management, John Burbank's Passport Capital

- Global macro firms such as: Paul Tudor Jones' Tudor Investment Corp,

- And, newer funds on the scene: David Stemerman's Conatus Capital. Check back each day as we cover new fund portfolios.

Louis Bacon's Moore Capital Management 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.

This week, turning the focus to global macro funds, we'll be checking in on Louis Bacon's Moore Capital Management. Do note that global macro funds are typically not necessarily equity focused funds. While they do indeed have equity exposure, the majority of their holdings are in other markets. So, we mainly track them to check in on their sector exposure to see what types of global macro themes they may be investing in. This is a switch from some of the more value oriented funds we've been covering, like the 'Tiger Cub' funds including Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, John Griffin's Blue Ridge Capital, and Andreas Halvorsen's Viking Global. Global macro funds seek to find investments in whatever market they can gain an edge, whether it be equities, bonds, currencies, debt, commodities, and more. But, they are only required to disclose equity holdings.

Louis Bacon comes from the group of "offspring" of the legendary Commodities Corporation. Moore emerged as a successful offspring along with fellow great macro traders Bruce Kovner (Caxton Associates) and Paul Tudor Jones (Tudor Investment Corp). Moore, named after Bacon's middle name, is a $10 billion global macro set of hedge funds. Louis Bacon is a famed trader and risk manager. And, interestingly enough, Bacon helped get his firm off the ground when Paul Tudor Jones stopped accepting capital from investors and instead turned them to Bacon's firm. Returning 31% annually since inception in 1990, Bacon can be very proud of his flagship fund, Moore Global Investments. But, it doesn't stop there. His returns have shown little correlation to the stock market and low volatility. He is the definition of a risk manager. For 2008, their Global Investments fund finished -4.3%, their Global Fixed Income fund finished +1.3%, and their Emerging Markets Fund finished -17.6%, as noted in our comprehensive list of hedge fund performance numbers.

Bacon credits his risk management skills to the futures markets, where he learned to be sensitive to market action. And, he learned such skills at an early age. While getting his MBA at Columbia, he used his student loan money to trade. And, he lost it all. Clearly, he learned a lesson he would never forget. Such a lesson stuck with him as he worked various jobs in the financial industry before eventually starting his own firm. And, in his first year managing Moore Capital Management, he returned 86%. Bacon strives to identify long running macro trends. While he has a longer-term macroeconomic view, he won't let that stop him from making money by trading around the position in the mean time. If you want to hear some insightful thoughts from Louis Bacon himself, head over to our post on Hedge Fund manager interviews.

Many successful members of Moore have gone on to start their own funds. For instance, we track Bret Barakett's Tremblant Capital, who learned his trade at Moore. Also, its worth pointing out that Stanley Shopkorn, formerly of Moore Capital, has started his own fund. Additionally, we recently learned that Christopher Pia, another Moore alum will be starting his own fund. But, enough about those who have gone on to do their own thing. Let's check out what Moore was up to.

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):
Transocean (RIG)
Home Depot (HD)
Lowe (LOW)
State Street (STT)
Bristol Myers Squibb (BMY)
AMR (AMR)
PS Wilderhill (PBW)
Continental Airlines (CAL)
Philip Morris International (PM)
Whirlpool (WHR)
Delta Air (DAL)
Exxon Mobil (XOM)
Lennar (LEN)
Toll Brothers (TOL)
Altria (MO)
Shaw Group (SGR)
Foster Wheeler (FWLT)
Stanley Works (SWK)
First Solar (FSLR)
Procter & Gamble (PG) Puts
Exxon Mobil (XOM) Puts
Mylan (MYL)
Hartford Financial (HIG)
Carnival (CCL)
Occidental Petroleum (OXY) Puts
IPC Holdings (IPCR)
Potash (POT)
Hess (HES) Calls
Suncor (SU) Puts
Flextronics (FLEX)


Some Increased Positions (A few positions they already owned but added shares to)
US Steel (X): Increased position by 725%
Electronic Arts (ERTS): Increased position by 683%
Navistar (NAV): Increased position by 521%
Vale (RIO): Increased position by 400%
Commercial Metals (CMC): Increased position by 386%
Walter Industries (WLT): Increased position by 313%
AK Steel (AKS): Increased position by 303%
Select Sector Energy (XLE): Increased position by 260%
Micron (MU): Increased position by 42%
Suncor (SU) Calls: Increased position by 18%


Some Reduced Positions (Some positions they sold some shares of - note not all sales listed)
Sandisk (SNDK) Calls: Reduced by 95%
Cresud (CRESY): Reduced by 84%
Water Resources ETF (PHO): Reduced by 68%
Petroleo Brasileiro (PBR): Reduced by 67%
Hewlett Packard (HPQ): Reduced by 60%
Energy Solutions (ES): Reduced by 42%
Crown Holdings (CCK): Reduced by 41%
Ace (ACE: Reduced by 35%
Textron (TXT) Calls: Reduced by 20%
Homebuilders ETF (XHB): Reduced by 14%


Removed Positions (Positions they sold out of completely)
Foundry Networks (FDRY)
Companhia Siderurgica (SID)
Cemex (CX)
Formfactor (FORM)
Citigroup (C)
Hewlett Packard (HPQ) Puts
Wells Fargo (WFC)
Teradata (TDC) Calls
Chevron (CVX)
Cisco (CSOC) Puts
Informatica (INFA) Call
Genentech (DNA)
Rio Tinto (RTP)
Citrix (CTXS)
Lennar (LEN) Puts
Activision Blizzard (ATVI)
Informatica (INFA)
Qualcomm (QCOM)
Anheuser Busch (BUD)
Barr Pharma (BRL)
Cameco (CCJ)
Imclone (IMCL)
Applied Materials (AMAT) Calls
Data Domain (DDUP) Calls
Barclays (BCS-PD) Preferred D
Rohm & Haas (ROH)
KLA Tencor (KLAC) Calls
Goldman Sachs (GS)
Ishares Emerging Markets (EEM)
JPMorgan Chase (JPM)


Top 20 Holdings (by % of portfolio)

1. Select Sector Energy (XLE): 13.67% of portfolio
2. Select Sector Energy (XLE) Puts: 8.72% of portfolio
3. Select Sector Energy (XLE) Calls: 8.72% of portfolio
4. Max Capital (MXGL): 5% of portfolio
5. Transocean (RIG): 4% of portfolio
6. Ace (ACE): 3.9% of portfolio
7. Home Depot (HD): 3.5% of portfolio
8. Lowe (LOW): 3.34% of portfolio
9. State Street (STT): 3.25% of portfolio
10. Homebuilders ETF (XHB): 2.9% of portfolio
11. Bristol Myers Squibb (BMY): 2.26% of portfolio
12. Electronic Arts (ERTS): 1.75% of portfolio
13. Water Resources ETF (PHO): 1.75% of portfolio
14. AMR (AMR): 1.6% of portfolio
15. PS Wilderhill (PBW): 1.6% of portfolio
16. Continental Airlines (CAL): 1.5% of portfolio
17. Philip Morris International (PM): 1.5% of portfolio
18. Whirlpool (WHR): 1.5% of portfolio
19. Delta Airlines (DAL): 1.5% of portfolio
20. US Steel (X): 1.5% of portfolio

Moore was out adding massively for a few select names, increasing their position in many cases by > 300%. There seems to be a theme of a lot of economic recovery and 'early cycle' plays as if to position the portfolio to benefit from an increase in global activity. Assets from the collective long US equity, options, and note holdings were $1.3 billion last quarter and were $821 million 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, James Pallotta's Raptor Capital Management, Lee Ainslie's Maverick Capital, John Griffin's Blue Ridge Capital, Bruce Kovner's Caxton Associates, and Paul Tudor Jones' Tudor Investment Corp. Look for our updates as we will be covering a new fund each day.

Global Macro Hedge Funds Returning to Their Roots

If someone was asked to name a fund in the global macro game, undoubtedly Tudor Investment Corp or Moore Capital Management would be some of the most frequent responses. The global macro strategy has fared well in the world of hedge funds. Paul Tudor Jones' Tudor Investment Corp has earned an annualized return of greater than 20% over the span of two decades. Louis Bacon's of Moore Capital Management shares the same accolade. And, while they are both down this year, they have fared much better relative to many of their peers and the market indexes in general. Tudor's flagship fund finds itself -5% for the year, while Moore was -2.9% year-to-date through November as we noted in our November hedge fund performance update. But, in a never-ending quest for outperformance, Tudor and Bacon want more. And, in order to accomplish that, they see it fit to return to their roots.

Taken from Moore Capital Management's latest letter to investors, Bacon wrote,

"...We had become disheartened by the complexity of our portfolio given our results and took decisive steps to change our format....
...The combination of a streamlined and liquid portfolio, high cash balances and mostly macro-oriented managers has allowed us to focus on the opportunities in a macro period that is going to continue to be of historic proportions..."

Moore's funds saw requests for redemptions to the tune of 8% of the fund's assets. Bacon seemed worried that his firm had become almost 'too diversified' and had become overstretched, trying to hit every idea. Bacon noted that he will cease private equity investments and will allocate more money to his global macro traders and equity investment team. This decision comes as a polar opposite to what we've recently seen in Moore's portfolio. Their equity holdings decreased from $4.45 billion two quarters prior to only $1.36 billion this past quarter. So, as Bacon has noted, we should see a change there in the coming months and year.

Paul Tudor Jones shares similar thoughts to his global macro colleague. Recently, Tudor halted withdrawals from its Global BVI Fund, in an effort to separate illiquid from liquid assets. Much like Moore Capital Management, Tudor was out decreasing equity exposure across the board last quarter, as we noted in our latest update of Tudor's portfolio.

In his letter to investors, Tudor talked about returning to the global macro roots he built his firm upon, writing,

"Those of you who have visited recently have heard me refer to this return to our roots as back to the future."

Overall, global macro funds have weathered the storm relatively well this year. In part, this is due to their ability to maneuver between multiple markets, wherever they see opportunity. And, unless equity indexes can ramp up and lend a hand to value oriented players, we think macro funds will continue to be poised to outperform relative to their peers and the markets in general; especially as they cease to outstretch themselves and return to their roots.



Source: Bloomberg

Hedge Fund Tracking: Moore Capital Management (Louis Bacon) - 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
• David Einhorn's Greenlight Capital
• Dan Loeb's Third Point
• Paul Tudor Jones' Tudor Investment Corp
  

Next up, we have Moore Capital Management, ran by Louis Bacon. Moore, named after Bacon's middle name, is a $10 billion global macro set of hedge funds. The next few funds we will be covering are global macro oriented funds, which is a switch from some of the more value oriented funds we've been covering, like the 'Tiger Cub' funds including Stephen Mandel's Lone Pine Capital, Lee Ainslie's Maverick Capital, John Griffin's Blue Ridge Capital, and Andreas Halvorsen's Viking Global. Global macro funds seek to find investments in whatever market they can gain an edge, whether it be equities, bonds, currencies, debt, commodities, and more. So, keep in mind that these equity positions only represent a portion of the fund's overall holdings. They are not required to disclose holdings outside of equities, notes, and stock options.

Louis Bacon is a famed trader and risk manager. He comes from the group of "offspring" of the legendary Commodities Corp. Bacon emerged as one of the great macro traders alongside the likes of Paul Tudor Jones (Tudor Investment Corp), and Bruce Kovner (Caxton Associates). And, interestingly enough, Bacon helped get his firm off the ground when Paul Tudor Jones stopped accepting capital from investors and instead turned them to Bacon's firm. Returning 31% annually since inception in 1990, Bacon can be very proud of his flagship fund, Moore Global Investments. But, it doesn't stop there. His returns have shown little correlation to the stock market and low volatility. He is the definition of a risk manager.

Bacon credits his risk management skills to the futures markets, where he learned to be sensitive to market action. And, he learned such skills at an early age. While getting his MBA at Columbia, he used his student loan money to trade. And, he lost it all. Clearly, he learned a lesson he would never forget. Such a lesson stuck with him as he worked various jobs in the financial industry before eventually starting his own firm. And, in his first year managing Moore Capital Management, he returned 86%. Bacon strives to identify long running macro trends. While he has a longer-term macroeconomic view, he won't let that stop him from making money by trading around the position in the mean time. If you want to hear some insightful thoughts from Louis Bacon himself, head over to our post on Hedge Fund manager interviews. Also, its worth pointing out that Stanley Shopkorn, formerly of Moore Capital, has started his own fund.

Before beginning, you might be interested in checking out Moore's portfolio holdings from the second quarter of 2008. The following were Moore'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):
Energy ETF (XLE) Calls
Energy ETF (XLE) Puts
Energy ETF (XLE)
Ishares Emergin Markets (EEM)
Ace (ACE)
Goldman Sachs (GS)
Homebuilders ETF (XHB)
Sandisk (SNDK) Calls
KLA Tencor (KLAC) Calls
Rohm & Haas (ROH)
Data Domain (DDUP) Calls
Applied Materials (AMAT) Calls
Imclone (IMCL)
Cameco (CCJ)
Barr Pharma (BRL)
Activision Blizzard (ATVI)
Lennar (LEN) Puts
Citrix (CTXS)
Rio Tinto (RTP)
Informatica (INFA) Calls
Teradata (TDC) Calls
Wells Fargo (WFC)
Hewlett Packard (HPQ) Puts
Citigroup (C)
Cemex (CX)
Siderurgica (SID)
Foundry (FDRY)
Bucyrus (BUCY) Calls
Texas Instruments (TXN) Calls
International Rectifier (IRF)


Added to (Positions they already owned but added shares to)
Travelers (TRV): Increased by 1920%
SYMS (SYMS): Increased by 236%
EnergySolutions (ES): Increased by 100%
Chevron (CVX): Increased by 48%
Cisco (CSCO) Puts: Increased by 14%


Some Reduced Positions (Positions they sold some shares of - note not all sales listed)
Petroleo Brasileiro Cl A (PBR-A): Reduced by 79%
Electronic Arts (EA): Reduced by 95%
Tyson Foods (TSN): Reduced by 77%
Limelight networks (LLNW): Reduced by 55%
Walter Industries (WLT): Reduced by 84%
Crown Holdings (CCK): Reduced by 43%
Freeport McMoran (FCX): Reduced by 98%
Alpha Natural Resources (ANR): Reduced by 83%
Nvidia (NVDA): Reduced by 94%
Vale (RIO): Reduced by 94%
JP Morgan (JPM): Reduced by 38%
Powershares Water Resource (PHO): Reduced by 35%
Petroleo Brasileiro (PBR): Reduced by 9%
Barclays Bank Preferred Shares (BCS-PD): Reduced by 56%
Hewlett Packard (HPQ): Reduced by 57%
Qualcomm (QCOM): Reduced by 83%
Anheuser Busch (BUD): Reduced by 43%
Informatica (INFA): Reduced by 48%
Formfactor (FORM): Reduced by 50%


Removed Positions (Positions they sold out of completely)
Chesapeake (CHK) Calls
Chesapeake Energy (CHKDO) Convertible Bonds
Petrohawk (HK)
Powershares QQQ (QQQQ) Puts
Lehman Brothers (LEHMQ)
Philip Morris International (PM)
Merrill Lynch (MER) Puts
Sandridge Energy (SD)
Google (GOOG)
Petroleo Brasileiro (PBR) Puts
Marathon Oil (MRO)
Sotheby (BID)
Coca Cola (KO)
Potash (POT)
Comstock (CRK)
Ishares Transports (IYT) Puts
Goodrich Petroleum (GDP)
Terra Industries (TRA)
Arch Coal (ACI)
Agrium (AGU)
Teva Pharma Convertible Bonds (TEVA)
Target (TGT) Puts
Apple (AAPL)
Activision (converted into new shares of Activision Blizzard - ATVI)
Massey Energy (MEE)
Fomento Economico (FMX)
Goldman Sachs (GS) Puts
Mosaic (MOS)
Univanco (UBB)
Grupo Televisa (TV)


Top 20 Holdings (by % of portfolio)

1. JPMorgan Chase (JPM): 9.1% of portfolio
2. Energy ETF (XLE) Puts: 7% of portfolio
3. Energy ETF (XLE) Calls: 7% of portfolio
4. Ishares Emerging Markets (EEM): 6.8% of portfolio
5. Powershares Water Resource (PHO): 4.2% of portfolio
6. Max Capital (MXGL): 4% of portfolio
7. Ace (ACE): 3.7% of portfolio
8. Goldman Sachs (GS): 3.6% of portfolio
9. Homebuilders ETF (XHB): 3.4% of portfolio
10. Energy ETF (XLE): 3.4% of portfolio
11. Sandisk (SNDK) Calls: 2.9% of portfolio
12. Petroleo Brasileiro (PBR): 2.4% of portfolio
13. KLA Tencor (KLAC): 2.3% of portfolio
14. Rohm & Haas (ROH): 2% of portfolio
15. Barclays (BCS-PD) Preferred Shares: 1.8% of portfolio
16. Hewlett Packard (HPQ): 1.7% of portfolio
17. Data Domain (DDUP) Calls: 1.5% of portfolio
18. Applied Materials (AMAT) Calls: 1.5% of portfolio
19. Imclone (IMCL): 1.4% of portfolio
20. Cameco (CCJ): 1.4% of portfolio

Assets from the collective holdings were $4.45 billion last quarter and were only $1.36 billion this quarter. Much like Tudor, Moore was decreasing exposure to equities all across the board. 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, David Einhorn's Greenlight Capital, and Dan Loeb's Third Point, and Paul Tudor Jones' Tudor Investment Corp. 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 Louis Bacon & Moore Capital Management:
- Stanley Shopkorn (ex-Moore Capital) starts new fund
- Moore's second quarter of 2008 portfolio
- 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