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This is the Third 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.

The other funds we've already covered include:

Next up is Jana Partners, which is run by Barry Rosenstein. Jana was recently ranked 79th in Alpha's Hedge Fund Rankings. Jana was founded in 2001 and typically employs activist, market neutral, and long/short equity strategies in public equity markets. Rosenstein received his B.S. from Lehigh University and his MBA from the Wharton School of Business at the University of Pennsylvania. Jana has returned 20.9% each year annualized from 2001 until 2007. Rosenstein sees Jana's future in a strategy that uses management adjustments to force change at companies, which in turn can send shares higher.

A few months back in our hedge fund performance numbers update, we noted that Jana's piranha fund was -19.2% for October and was -21.7% for the year at that time. Additionally, their Nirvana fund fell 13.2% in October and was down 21.9% ytd at that time. Lastly, the Jana Partners fund had a much better October than its other funds, being down 6.6% for that month, but was still down 20.4% for the year at that time. As you can see, a big chunk of its losses came solely from the month of October.

As we posted earlier, Jana has hit a rough patch this year and is on track for its first yearly loss ever. We've also recently covered some of Jana's big moves, including taking a 13.52% ownership stake in Convergys (NYSE:CVG) and a 5.7% ownership stake in Hayes Lemmerz (HAYZ).

The following were its long equity, note, and options holdings as of September 30, 2008 as filed with the SEC. All holdings are common stock unless otherwise denoted.

Some New Positions (Brand new positions that it initiated in the last quarter):

  • Aetna (NYSE:AET)
  • Wells Fargo (NYSE:WFC)
  • Pfizer (NYSE:PFE)
  • Marathon Oil (NYSE:MRO)
  • Bank of America (NYSE:BAC)
  • Ace (NYSE:ACE)
  • Regional Bank Holdrs (NYSEARCA:RKH)
  • Cigna (NYSE:CI)
  • Telephone & Data (NYSE:TDS)
  • KBW Regional Banking ETF (NYSEARCA:KRE)
  • Select Sector Financial ETF (NYSEARCA:XLF) Calls
  • Quanex Building (NYSE:NX)
  • Microsoft (NASDAQ:MSFT) Calls
  • Medarex (MEDX)
  • Teletech Holdings (NASDAQ:TTEC)
  • John Bean Tech (NYSE:JBT)
  • T Rowe Price (NASDAQ:TROW)
  • Holly (HOC)
  • McDonalds (NYSE:MCD)
  • JDA Software (NASDAQ:JDAS)
  • X-rite (NASDAQ:XRIT)
  • Lehman Brothers (OTC:LEHMQ)

Some Increased Positions (A few positions it already owned but added shares to):

  • Hanover Insurance (NYSE:THG): Increased position by 117%
  • Medicis Pharma (MRX): Increased position by 76%
  • Invitrogen (IVGN): Increased position by 62%
  • Williams Companies (NYSE:WMB): Increased position by 33%
  • Commscope (CTV): Increased position by 32%
  • Graphic Packaging (NYSE:GPK): Increased position by 28%
  • Convergys (CVG): Increased position by 50%
  • Health Net (NYSE:HNT): Increased position by 29%
  • Corel (CREL): Increased position by 19.5%
  • Hayes Lemmerz (HAYZ): Increased position by 12%
  • Agilysys (NASDAQ:AGYS): Increased position by 10%
  • Maximus (NYSE:MMS): Increased position by 9%

Some Reduced Positions (Some positions it sold some shares of - note not all sales listed)

  • Focus Media (NASDAQ:FMCN): Reduced position by 73%
  • KBR (NYSE:KBR): Reduced position by 68%
  • AK Steel (NYSE:AKS): Reduced position by 62%
  • Shire (SHPGY): Reduced position by 61%
  • Xerium Tech (NYSE:XRM): Reduced position by 51%
  • M&F Worldwide (NYSE:MFW): Reduced position by 42%
  • Chubb (NYSE:CB): Reduced position by 23%
  • MF Global (MF): Reduced position by 20%
  • HCC Insurance (NYSE:HCC): Reduced position by 9%

Removed Positions (Positions it sold out of completely):

  • Comstock Resources (NYSE:CRK)
  • Cisco Systems (NASDAQ:CSCO)
  • Anadarko Petroleum (NYSE:APC) Calls
  • Taiwan Semi (NYSE:TSM)
  • Conoco Phillips (NYSE:COP) Puts
  • United Health (NYSE:UNH)
  • Forest Oil (NYSE:FST)
  • Nokia (NYSE:NOK)
  • Devon Energy (NYSE:DVN)
  • Hess (NYSE:HES) Calls
  • National Oilwell Varco (NYSE:NOV)
  • Equitable Resources (NYSE:EQT)
  • First American (NYSE:FAF)
  • Genentech (DNA)
  • Century Aluminum (NASDAQ:CENX)
  • Oracle (NYSE:ORCL)
  • Omnicare (NYSE:OCR)
  • Sandridge Energy (NYSE:SD)
  • Microsoft (MSFT)
  • Transocean (NYSE:RIG)
  • Peabody Energy (NYSE:BTU)
  • Consol Energy (NYSE:CNX)
  • Anadarko Petroleum (APC)
  • Commercial Metals (NYSE:CMC)
  • Cnet - inactive
  • Talisman Energy (NYSE:TLM)
  • Hess (HES)
  • Calpine (NYSE:CPN)
  • Select Sector Energy (NYSEARCA:XLE) Puts
  • iShares Russell 2000 index (NYSEARCA:IWM) Puts

Top 20 Holdings (by % of portfolio):

  1. Copart (NASDAQ:CPRT): 12.3% of portfolio
  2. Convergys (CVG): 10.8% of portfolio
  3. Health net (HNT): 7.5% of portfolio
  4. HCC Insurance (HCC): 5.1% of portfolio
  5. Invitrogen (IVGN): 4.8% of portfolio
  6. Commscope (CTV): 4.6% of portfolio
  7. Williams Companies (WMB): 4% of portfolio
  8. Aetna (AET): 3.9% of portfolio
  9. Chubb (CB): 3% of portfolio
  10. Wells Fargo (WFC): 2.8% of portfolio
  11. American Italian Pasta (AIPC): 2.3% of portfolio
  12. Pfizer (PFE): 1.9% of portfolio
  13. Ak Steel (AKS): 1.9% of portfolio
  14. Marathon Oil (MRO): 1.9% of portfolio
  15. Bank of America (BAC): 1.8% of portfolio
  16. MF Global (MF): 1.8% of portfolio
  17. Ace (ACE): 1.8% of portfolio
  18. Regional Bank Holdrs (RKH): 1.8% of portfolio
  19. NBTY (NTY): 1.7% of portfolio
  20. Maximus (MMS): 1.6% of portfolio

Assets from the collective holdings were $5.89 billion last quarter and were $2.14 billion this quarter. The fund definitely decreased its long U.S. equity exposure by a good amount, as did many other hedge funds we've covered. For the most part, it was selling entire positions rather than partial positions.

Please note that we have not detailed changes 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. They do not reflect the fund's cash, short portions, or holdings in other markets (currency, commodities, debt, foreign markets, etc.).

Overall, it's been one of the worst years ever for hedge funds, as we noted in our new November hedge fund performance number update. Thus, the recent moves they've made in their portfolios become all the more interesting given the way the market has played out.

Source: Hedge Fund Tracking: Barry Rosenstein's Jana Partners, Q3 2008