Top Funds' Activity in Q3 2022

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Hank Tucker of Forbes reports Elon Musk’s Twitter buyout was a billion dollar windfall for these 13 hedge funds:

For many hedge funds, Elon Musk’s $44 billion “forced” purchase of Twitter represented an easy money trade.

“You didn’t have to be a genius to realize that he was going to finish that deal,” said Carl Icahn at the Forbes Iconoclast Summit on November 3, adding that he would have considered waging a proxy fight if the deal fell through.

Icahn told the audience at New York’s Historical Society that he made a profit of around $250 million by investing in Twitter this summer. But he was far from the only one to benefit. Regulatory filings show that billionaire-led hedge funds including Citadel Advisors, Millennium Management, D.E. Shaw and Third Point built large positions in Twitter in the second and third quarters, as well as other firms like Pentwater Capital and Farallon Capital.

Musk signed a merger agreement to buy Twitter for $54.20 per share in April, but the stock was trading as low as $32.65 by July when he tried to terminate the deal. That created an arbitrage opportunity for as much as a 66% return for investors who doubted Musk had much of a chance in the Delaware Court of Chancery to back out.

It's been a while since I covered top funds' activity so I thought I'd go through it here.

Twitter which is now delisted since Elon Musk took it private is an easy example of where top funds made money:

Of course, the way things are going, it's probably good that Twitter isn't listed because the shares would be tanking right now:
 

And my personal favorite:

Here is a thought, maybe Elon Musk is the world's richest person (for now) but he stinks as a manager and needs to stop tweeting and get real here, things are not going well at Twitter. 

And judging by the looks of this weekly chart, things are not going well at Tesla either:

Tesla short sellers are making great money lately but the real killing lies ahead!

Alright, it's that time of the year again when we get a sneak peek inside the portfolios of the world's top money managers with a customary 45-day lag. 

Before I get to it, make sure you read the last time I covered top funds' activity in Q4 2021 where I warned my readers this isn't the time to chase Chase Coleman and other gurus and ended with this stark warning:

[...] I used to invest in top hedge funds and grill their managers hard on their positions, macro views and risk management (most are terrible at managing downside risks).

I can sit down with all these "gurus" and drill down into their portfolios and point out the dogs and what's worth holding on to.

Right now is a dangerous time to be invested in stocks and bonds. 

Everyone is wondering if the Nasdaq will retest its January low and hold or keep sinking lower: 

I have no clue, the only thing I know is investors need to manage their risk carefully here because the monetary coronavirus that afflicted bears two years ago is gone.

One question I always get, especially from young traders, is can stocks go a lot lower?

My answer is unequivocal: "You bet your ass they can go a lot lower".

Unless you've lived through the tech meltdown of 2001 and the great financial crisis meltdown, you have no clue about how it feels being in a nasty bear market. 

And as I stated in late January, Jeremy Grantham might be right, this might be the nastiest bear market ever, even nastier than the 1973-74 bear market.

Who knows? Maybe not but always, always be prepared for anything and manage your downside risk very carefully.

Never mind chasing Chase Coleman and other gurus, that’s a sure road to ruin!

I can't stress this enough, now isn't the time to speculate on stocks, now more than ever is the time to manage your risk carefully and really understand the macro backdrop extremely well.

I'm also going to take this opportunity to plug Trahan Macro Research here because I hate to say it, but most investors still don't get what is going on in the US economy and how to properly position their portfolios.

Importantly, as I stated in my recent comment on whether the Fed is willing to sacrifice the market and economy to tame inflation: "Anyone who still thinks the Fed can engineer a soft landing next year deserves to have their head handed to them."

As I told Francois Trahan on a call earlier today, it amazes me how so many investors are getting this hard versus soft landing wrong but by this time next year when the US unemployment rate will be a lot higher, the harsh reality is going to settle in:

My point in all this is get the macro right and to do this properly, you need to pay for quality macro research which is why I'm doing all of you a favor in plugging Trahan Macro Research (nobody marries macro insights with market insights better).

What else surprised me this week? All the hoopla about James Bullard's comments:

Give me a break, I think CNBC's Steve Liesman was the only person who got it right, explaining the Taylor Rule and why Bullard stated a 7% terminal rate may be necessary. 

Stock bulls hate the Taylor Rule, they just want the Fed to provide them with more monetary heroine.

They'll soon find out that their imaginary pivot isn't coming:

Ah Leo, are you getting all bearish on us? Come on, the major averages ticked higher in afternoon trading Friday to end the day on an upbeat note and stocks have done well over the past month.

Yup, it's called a bear market rally, stocks never go up or down in a straight line! 

As Francois Trahan explained in his latest conference call, the macro data will look temporarily better fooling many to believe the worst is behind us, but it isn't. 

Bear market rallies are fun but you'll know when the real bear market hits us because buying the dip indiscriminately won't work.  

Still, I will be the first to tell you some dips on some stocks generated huge returns this year. 

For example, here are some I've been tracking this year:



Some bullet notes below to walk you though these charts:

  • Bill Ackman was way too early buying and then selling Netflix (NFLX), taking a $400 million loss back in April, but from bottoming at $163 in June to hitting a recent high of $312, this stock had a great run (I wouldn't touch it now, get ready to short it).
  • NVIDIA (NVDA) is the beta beast in the semi world and some hedge funds like Coatue bought it last quarter. After hitting a low of $108 in October, its stock price rocketed up to a recent high of $170 before declining after earnings this week (again, I wouldn't touch it, get ready to short it again).
  • Amazon (AMZN) was a great buy before the May CPI report came out mid June and bounced a bit after the September CPI report came out in mid October but it remains weak so I wouldn't rush to buy it here.
  • Same with Adobe, it popped recently but remains very weak.
  • Chinese tech stocks (KWEB) led by Alibaba (BABA) and Bidu (BIDU) have come off their lows but they remain very weak and move up and down on rumors of China reopening.
  • I can kick myself for not buying the big dip on Mirati Therapeutics (MRTX) back in May as I knew it was a top holding of Perceptive Advisors, one of the best biotech funds. Its top holding remains Amicus Therapeutics (FOLD) and some of its other top holdings like Global Blood Therapeutics, got bought out recently (Pfizer bought it out).  
  • Last but not least, while everyone is talking about how great traditional energy stocks have done this year, check out shares of First Solar (FSLR) which hit a low of $59.60 back in July and then never looked back (don't chase it here after this huge run-up but this is a very bullish chart, the most bullish of all the other ones). Steve Cohen's Point72 added to its position last quarter but the big investors here are not hedge funds.

Alright, I've rambled on enough, time to wrap it up.

I should charge hedge fund premium prices just for my market comments but alas, most of you are getting them for free (you can donate any amount under my picture on the top left-hand side of my blog via PayPal).

Now, have fun looking into the portfolios of the world's most famous money managers.

The links below take you straight to their top holdings and then click to see where they increased and decreased their holdings (see column headings).

Top multi-strategy, event driven hedge funds and large hedge fund managers

As the name implies, these hedge funds invest across a wide variety of hedge fund strategies like L/S Equity, L/S credit, global macro, convertible arbitrage, risk arbitrage, volatility arbitrage, merger arbitrage, distressed debt and statistical pair trading. Below are links to the holdings of some top multi-strategy hedge funds I track closely:

1) Appaloosa LP

2) Citadel Advisors

3) Balyasny Asset Management

4) Point72 Asset Management (Steve Cohen)

5) Peak6 Investments

6) Kingdon Capital Management

7) Millennium Management

8) Farallon Capital Management

9) HBK Investments

10) Highbridge Capital Management

11) Highland Capital Management

12) Hudson Bay Capital Management

13) Pentwater Capital Management

14) Sculptor Capital Management (formerly known as Och-Ziff Capital Management)

15) ExodusPoint Capital Management

16) Carlson Capital Management

17) Magnetar Capital

18) Whitebox Advisors

19) QVT Financial 

20) Paloma Partners

21) Weiss Multi-Strategy Advisors

22) York Capital Management

23) Man Group

Top Global Macro Hedge Funds and Family Offices

These hedge funds gained notoriety because of George Soros, arguably the best and most famous hedge fund manager. Global macros typically invest across fixed income, currency, commodity and equity markets.

George Soros, Carl Icahn, Stanley Druckenmiller, Julian Robertson  have converted their hedge funds into family offices to manage their own money.

1) Soros Fund Management

2) Icahn Associates

3) Duquesne Family Office (Stanley Druckenmiller)

4) Bridgewater Associates

5) Pointstate Capital Partners 

6) Caxton Associates (Bruce Kovner)

7) Tudor Investment Corporation (Paul Tudor Jones)

8) Tiger Management (Julian Robertson)

9) Discovery Capital Management (Rob Citrone)

10 Moore Capital Management

11) Rokos Capital Management

12) Element Capital

13) Bill and Melinda Gates Foundation Trust (Michael Larson, the man behind Gates)

Top Quant and Market Neutral Hedge Funds

These funds use sophisticated mathematical algorithms to make their returns, typically using high-frequency models so they churn their portfolios often. A few of them have outstanding long-term track records and many believe quants are taking over the world. They typically only hire PhDs in mathematics, physics and computer science to develop their algorithms. Market neutral funds will engage in pair trading to remove market beta. Some are large asset managers that specialize in factor investing.

1) Alyeska Investment Group

2) Renaissance Technologies

3) DE Shaw & Co.

4) Two Sigma Investments

5) Cubist Systematic Strategies (a quant division of Point72)

6) Numeric Investors now part of Man Group

7) Analytic Investors

8) AQR Capital Management

9) Dimensional Fund Advisors

10) Quantitative Investment Management

11) Oxford Asset Management

12) PDT Partners

13) Angelo Gordon

14) Quantitative Systematic Strategies

15) Quantitative Investment Management

16) Bayesian Capital Management

17) SABA Capital Management

18) Quadrature Capital

19) Simplex Trading

Top Deep Value, Activist, Growth at a Reasonable Price, Event Driven and Distressed Debt Funds

These are among the top long-only funds that everyone tracks. They include funds run by legendary investors like Warren Buffet, Seth Klarman, Ron Baron and Ken Fisher. Activist investors like to make investments in companies where management lacks the proper incentives to maximize shareholder value. They differ from traditional L/S hedge funds by having a more concentrated portfolio. Distressed debt funds typically invest in debt of a company but sometimes take equity positions.

1) Abrams Capital Management (the one-man wealth machine)

2) Berkshire Hathaway

3) TCI Fund Management

4) Baron Partners Fund (click here to view other Baron funds)

5) BHR Capital

6) Fisher Asset Management

7) Baupost Group

8) Fairfax Financial Holdings

9) Fairholme Capital

10) Gotham Asset Management

11) Fir Tree Partners

12) Elliott Investment Management (Paul Singer)

13) Jana Partners

14) Miller Value Partners (Bill Miller)

15) Highfields Capital Management

16) Eminence Capital

17) Pershing Square Capital Management

18) New Mountain Vantage  Advisers

19) Atlantic Investment Management

20) Polaris Capital Management

21) Third Point

22) Marcato Capital Management

23) Glenview Capital Management

24) Apollo Management

25) Avenue Capital

26) Armistice Capital

27) Blue Harbor Group

28) Brigade Capital Management

29) Caspian Capital

30) Kerrisdale Advisers

31) Knighthead Capital Management

32) Relational Investors

33) Roystone Capital Management

34) Scopia Capital Management

35) Schneider Capital Management

36) ValueAct Capital

37) Vulcan Value Partners

38) Okumus Fund Management

39) Eagle Capital Management

40) Sasco Capital

41) Lyrical Asset Management

42) Gabelli Funds

43) Brave Warrior Advisors

44) Matrix Asset Advisors

45) Jet Capital

46) Conatus Capital Management

47) Starboard Value

48) Pzena Investment Management

49) Trian Fund Management

50) Oaktree Capital Management

51) Fayez Sarofim & Co 

Top Long/Short Hedge Funds

These hedge funds go long shares they think will rise in value and short those they think will fall. Along with global macro funds, they command the bulk of hedge fund assets. There are many L/S funds but here is a small sample of some well-known funds.

1) Adage Capital Management

2) Viking Global Investors

3) Greenlight Capital

4) Maverick Capital

5) Pointstate Capital Partners 

6) Marathon Asset Management

7) Tiger Global Management (Chase Coleman)

8) Coatue Management

9) D1 Capital Partners

10) Artis Capital Management

11) Fox Point Capital Management

12) Jabre Capital Partners

13) Lone Pine Capital

14) Paulson & Co.

15) Bronson Point Management

16) Hoplite Capital Management

17) LSV Asset Management

18) Hussman Strategic Advisors

19) Cantillon Capital Management

20) Brookside Capital Management

21) Blue Ridge Capital

22) Iridian Asset Management

23) Clough Capital Partners

24) GLG Partners LP

25) Cadence Capital Management

26) Honeycomb Asset Management

27) New Mountain Vantage

28) Penserra Capital Management

29) Eminence Capital

30) Steadfast Capital Management

31) Brookside Capital Management

32) PAR Capital Capital Management

33) Gilder, Gagnon, Howe & Co

34) Brahman Capital

35) Bridger Management 

36) Kensico Capital Management

37) Kynikos Associates

38) Soroban Capital Partners

39) Passport Capital

40) Pennant Capital Management

41) Mason Capital Management

42) Tide Point Capital Management

43) Sirios Capital Management 

44) Hayman Capital Management

45) Highside Capital Management

46) Tremblant Capital Group

47) Decade Capital Management

48) Suvretta Capital Management

49) Bloom Tree Partners

50) Cadian Capital Management

51) Matrix Capital Management

52) Senvest Partners

53) Falcon Edge Capital Management

54) Park West Asset Management

55) Melvin Capital Partners

56) Owl Creek Asset Management

57) Portolan Capital Management

58) Proxima Capital Management

59) Tourbillon Capital Partners

60) Impala Asset Management

61) Valinor Management

62) Marshall Wace

63) Light Street Capital Management

64) Rock Springs Capital Management

65) Rubric Capital Management

66) Whale Rock Capital

67) Skye Global Management

68) York Capital Management

69) Zweig-Dimenna Associates

Top Sector and Specialized Funds

I like tracking activity funds that specialize in real estate, biotech, healthcare, retail and other sectors like mid, small and micro caps. Here are some funds worth tracking closely.

1) Avoro Capital Advisors (formerly Venbio Select Advisors)

2) Baker Brothers Advisors

3) Perceptive Advisors

4) RTW Investments

5) Healthcor Management

6) Orbimed Advisors

7) Deerfield Management

8) BB Biotech AG

9) Birchview Capital

10) Ghost Tree Capital

11) Sectoral Asset Management

12) Oracle Investment Management

13) Palo Alto Investors

14) Consonance Capital Management

15) Camber Capital Management

16) Redmile Group

17) Casdin Capital

18) Bridger Capital Management

19) Boxer Capital
20) Omega Fund Management
21) Bridgeway Capital Management

22) Cohen & Steers

23) Cardinal Capital Management

24) Munder Capital Management

25) Diamondhill Capital Management 

26) Cortina Asset Management

27) Geneva Capital Management

28) Criterion Capital Management

29) Daruma Capital Management

30) 12 West Capital Management

31) RA Capital Management

32) Sarissa Capital Management

33) Rock Springs Capital Management

34) Senzar Asset Management

35) Southeastern Asset Management

36) Sphera Funds

37) Tang Capital Management

38) Thomson Horstmann & Bryant

39) Ecor1 Capital

40) Opaleye Management

41) NEA Management Company

42) Great Point Partners

43) Tekla Capital Management

44) Van Berkom and Associates

Mutual Funds and Asset Managers

Mutual funds and large asset managers are not hedge funds but their sheer size makes them important players. Some asset managers have excellent track records. Below, are a few funds investors track closely.

1) Fidelity

2) BlackRock Inc

3) Wellington Management

4) AQR Capital Management

5) Sands Capital Management

6) Brookfield Asset Management

7) Dodge & Cox

8) Eaton Vance Management

9) Grantham, Mayo, Van Otterloo & Co.

10) Geode Capital Management

11) Goldman Sachs Group

12) JP Morgan Chase & Co.

13) Morgan Stanley

14) Manulife Asset Management

15) UBS Asset Management

16) Barclays Global Investor

17) Epoch Investment Partners

18) Thornburg Investment Management

19) Kornitzer Capital Management

20) Batterymarch Financial Management

21) Tocqueville Asset Management

22) Neuberger Berman

23) Winslow Capital Management

24) Herndon Capital Management

25) Artisan Partners

26) Great West Life Insurance Management

27) Lazard Asset Management 

28) Janus Capital Management

29) Franklin Resources

30) Capital Research Global Investors

31) T. Rowe Price

32) First Eagle Investment Management

33) Frontier Capital Management

34) Akre Capital Management

35) Brandywine Global

36) Brown Capital Management

37) Victory Capital Management

38) Orbis Allan Gray

39) Ariel Investments 

40) ARK Investment Management

Canadian Asset Managers

Here are a few Canadian funds I track closely:

1) Addenda Capital

2) Letko, Brosseau and Associates

3) Fiera Capital Corporation

4) West Face Capital

5) Hexavest

6) 1832 Asset Management

7) Jarislowsky, Fraser

8) Connor, Clark & Lunn Investment Management

9) TD Asset Management

10) CIBC Asset Management

11) Beutel, Goodman & Co

12) Greystone Managed Investments

13) Mackenzie Financial Corporation

14) Great West Life Assurance Co

15) Guardian Capital

16) Scotia Capital

17) AGF Investments

18) Montrusco Bolton

19) CI Investments

20) Venator Capital Management

21) Van Berkom and Associates

22) Formula Growth

23) Hillsdale Investment Management

Pension Funds, Endowment Funds, Sovereign Wealth Funds and the Fed's Swiss Surrogate

Last but not least, I the track activity of some pension funds, endowment, sovereign wealth funds and the Swiss National Bank (aka the Fed's Swiss surrogate). Below, a sample of the funds I track closely:

1) Alberta Investment Management Corporation (AIMco)

2) Ontario Teachers' Pension Plan

3) Canada Pension Plan Investment Board

4) Caisse de dépôt et placement du Québec

5) OMERS Administration Corp.

6) Healthcare of Ontario Pension Plan (HOOPP)

7) British Columbia Investment Management Corporation (BCI)

8) Public Sector Pension Investment Board (PSP Investments)

9) PGGM Investments

10) APG All Pensions Group

11) California Public Employees Retirement System (CalPERS)

12) California State Teachers Retirement System (CalSTRS)

13) New York State Common Fund

14) New York State Teachers Retirement System

15) State Board of Administration of Florida Retirement System

16) State of Wisconsin Investment Board

17) State of New Jersey Common Pension Fund

18) Public Employees Retirement System of Ohio

19) STRS Ohio

20) Teacher Retirement System of Texas

21) Virginia Retirement Systems

22) TIAA CREF investment Management

23) Harvard Management Co.

24) Norges Bank

25) Nordea Investment Management

26) Korea Investment Corp.

27) Singapore Temasek Holdings 

28) Yale Endowment Fund

29) Swiss National Bank (aka, the Fed's Swiss surrogate)

Below, CNBC's Kristina Partsinevelos joins 'Fast Money' to discuss Appaloosa Management's David Tepper and his 13F filing. She also reports on Q3 investment actions made by Tiger Global.

Next, Roger Ferguson, former Federal Reserve vice chairman, joins CNBC's 'Squawk Box' to discuss the possibility of a Fed pivot on interest rates. He says the Fed has a long way to go. Take the time to watch this, he's spot on.

Fourth, Eric Johnston, Cantor Fitzgerald head of equity derivatives and cross asset, joined 'Closing Bell' Thursday to remark on his latest bearish call, earnings estimates and valuations risks in 2023 and the trajectory of Fed policy.

Lastly, the Macro Specialist Designation (M²SD) from Francois Trahan of Trahan Macro Research is a study program designed to help financial professionals understand how macro trends impact equity markets and how to successfully implement macro techniques in their investment analysis. 

It is structured around three levels of study and can be completed in as little as 18 months. The goal of the M²SD is to better prepare investors for today’s rapidly changing markets by helping them gain the knowledge to invest under all sorts of possible macro backdrops.

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