Hedge Fund Portfolio Tracking: Timothy Barakett's Atticus Capital Hedge Fund, Q4 2008

This is the Fourth 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.

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

Next up, we have Atticus Capital, the hedge fund ran by Timothy Barakett. Barakett founded the firm at age 26 in 1995 and focuses on taking large, concentrated positions in companies. One of Atticus' most famous investments was Phelps Dodge, a miner, which was bought out by Freeport McMoran. At one point, Atticus owned more than 9% of Phelps. Barakett received both his BA in Economics and his MBA from Harvard. It’s very evident that Barakett employs macro based investment theses. Once he has decided on what the trend is, he will find the best company within that trend and he will place a big bet. And, when needed, he will step in and take an activist role, ensuring the company is performing to his liking.

In 2005, Atticus' funds were up a combined 45% and in 2006, finished the year up, well over 30%. You may have heard about Atticus over the past year because, to put it politely, its performance has not been up to par. In a September hedge fund performance update, we noted that back Atticus European was -42.5% for 2008, while Atticus Global was -27.2% over the same timeframe. Consequently, Atticus was a victim of liquidation rumors, which were quickly denied. We previously analyzed Atticus' holdings back in June and noticed that, at the time, it had significant natural resource and mining positions.

The following were its long equity, note, and options holdings as of December 31, 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 it initiated in the last quarter):

• Google (GOOG)
• Peabody (BTU)
• Mastercard (MA) Puts
• CME Group (CME) Calls
• Wells Fargo (WFC)
• Google (GOOG) Puts
• CME Group (CME) Puts
• CME Group (CME)
• Mastercard (MA)
• USG (USG)
• Monsanto (MON)
• Burlington Northern (BNI)
• Baidu (BIDU)
• Visa (V)
• Google (GOOG) Calls
• Intercontinental Exchange (ICE)
• Norfolk Southern (NSC)
• Boeing (BA)
• Mastercard (MA) Calls
• NYSE Euronext (NYX) Puts
• Boeing (BA) Puts
• NYSE Euronext (NYX) Calls
• CSX (CSX)
• Ebay (EBAY)
• Valero (VLO)
• Potash (POT)
• iShares MSCI Emerging Markets Index (EEM)
• Vale (RIO)
• Boeing (BA) Calls

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

• Union Pacific (UNP)
• Freeport McMoran (FCX)

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

• Emisphere (EMIS)

Removed Positions (Positions it sold out of completely):

• Financial Select Sector SPDR (XLF) Puts
• Synvista (SYI)
• Crown Castle (CCI)
• iShares Russell 2000 Index (IWM) Puts
• Gold Fields (GFI)
• Newmont Mining (NEM)
• Occidental Petroleum (OXY)
• Western Union (WU)
• Telekomunikasi Indonesia (TLK)
• KT Corp (KTC)
• China Telecom (CHA)
• Grupo Aeroportuario Pacifico (PAC)
• Grupo Aeroportuario Sureste (ASR)
• Sony (SNE)
• Petrochina (PTR)

Top 20 Holdings (by % of portfolio):

1. Google (GOOG) Calls: 10.17% of portfolio
2. Mastercard (MA) Calls: 6.9% of portfolio
3. Potash (POT): 6.3% of portfolio
4. Microsoft (MSFT) Calls: 5.9% of portfolio
5. Microsoft (MSFT): 5.25% of portfolio
6. Boeing (BA) Calls: 4.34% of portfolio
7. NYSE Euronext (NYX): 3.94% of portfolio
8. Baidu (BIDU): 3.5% of portfolio
9. Google (GOOG) Puts: 3.13% of portfolio
10. Intercontinental Exchange (ICE): 2.87% of portfolio
11. CME Group (CME): 2.79% of portfolio
12. CSX (CSX) Calls: 2.7% of portfolio
13. Vale (RIO) Calls: 2.7% of portfolio
14. Union Pacific (UNP): 2.27% of portfolio
15. Oracle (ORCL) Calls: 2.25% of portfolio
16. iShares MSCI Emerging Markets Index (EEM): 2.23% of portfolio
17. Boeing (BA) Puts: 2.17% of portfolio
18. Mastercard (MA): 2.1% of portfolio
19. CME Group (CME) Calls: 2.1% of portfolio
20. CME Group (CME) Puts: 2.1% of portfolio

Atticus returned to many of its 'normal' portfolio holdings this past quarter after having sold off a lot of equities amidst the liquidation rumors. Basically, it previously owned a bunch of the names you see in its top 20 holdings, it sold them, and then bought back a lot of them. Isn't market volatility fun?

Assets from the collective long U.S. equity, options, and note holdings were $1.9 billion this quarter, back up from the $500 million they had last time around (which again highlights the massive deleveraging it saw during its little scare). So, things appear to be slowly stabilizing for the firm.

Comments

[PeteK:]

Most are good choices.
BA ? who knows.

Mar 01 01:00 AM