A Look at D.E. Shaw's Q408 Holdings: Just for Fun

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.

Next up is D.E. Shaw & Co. D.E. was founded in 1988 by David E. Shaw and manages around $33 billion as of December 1st 2008. D.E. Shaw focuses on intertwining technology and finance and is a hedge fund, private equity firm, and technology development shop all in one. It employs mainly quantitative strategies and does a lot of statistical arbitrage.

David Shaw oversees strategic maneuvers at the firm, but no longer is active in the day to day operations. He received his Ph.D. from Stanford University. Shaw also was recently seen on Forbes' billionaire list, as well as the list for Top 25 highest paid hedge fund managers for 2008. Some notable former employees include Jeff Bezos (before founding Amazon.com) and Lawrence Summers, who left the firm to serve on President Elect Obama’s economic team. Shaw has had a decent year thus far, seeing its Composite fund +0.8% for March and sitting at +5.59% year to date (through 3/31/09) as detailed in our March hedge fund performance numbers update. In terms of somewhat recent activity, we had noted its activity in Orient- Express Hotels (OEH) back in January, in an ongoing saga.

In Alpha's hedge fund rankings, D.E. Shaw is ranked 6th in the world. Taken from D.E. Shaw's website, the fund invests

“in a wide range of companies and financial instruments within both the major industrialized nations and a number of emerging markets. Its activities range from the deployment of investment strategies based on either mathematical models or human expertise to the acquisition of existing companies and the financing or development of new ones.”

Lastly, for those of you potentially interested in working at such an outfit, check out some of their past interview questions.

Disclaimer: Do note that tracking DE Shaw through 13F filings is not beneficial due to the quant nature of their firm. We are tracking it because it is a popular, prominent fund with solid returns and many readers continually request it. While the majority of funds we cover are appropriate for tracking given their strategy and research methods, there is no way for us to know the exact rhyme or reason behind DE's positions. So, we are simply posting this up for fun. Use this information for entertainment purposes only.

The following were Shaw's 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 it initiated in the last quarter):
Ventas (VTR), Apogent Tech (inactive), Essex Property Trust (ESS), US Bancorp (USB) Bond, Encana (ECA), Wendys/Arbys (WEN), Sybase (SY) Bond, Gilead (GILD) Bond, PSS World Medical (PSSI) Bond, Burlington Northern (BNI) Puts, Danaher (DHR), Medco Health (MHS), Best Buy (BBY) Bond, Occidental Petroleum (OXY) Puts, Dicks Sporting Goods (DKS) Bond, Kohls (KSS), Cliffs Natural Resources (CLF), Highwoods (HIW), Symantec (SYMC) Bond, Jones Lang Lasalle (JLL), Royal Dutch Shell (RDS.A), Senior Housing Properties (SNH), OReilly Automotive (ORLY), World Fuel Services (INT), L3 Communications (LLL), Ebay (EBAY) Puts, Dupont (DD) Puts, Kilroy Realty (KRC), NV Energy (NVE), & Hewitt Associates (HEW)


Some Increased Positions (A few positions it already owned but added shares to)
Abbott Laboratories (ABT): Increased by 467%
Bank of America (BAC) Calls: Increased by 110%
Apple (AAPL) Puts: Increased by 102%
Qualcomm (QCOM): Increased by 45%
Walmart (WMT): Increased by 28%
Laboratory Corp (LH) Bond: Increased by 20%
Abraxis Bioscience (ABII): Increased by 13%
Warner Chilcott (WCRX): Increased by 11%


Some Reduced Positions (Some positions Shaw sold some shares of - note not all sales listed)
Exxon Mobil (XOM): Reduced by 65%
Equity Residential (EQR): Reduced by 60%
Burlington Northern (BNI): Reduced by 45%
Union Pacific (UNP): Reduced by 44%
Pfizer (PFE): Reduced by 33%
News Corp (NWS.A): Reduced by 31%
Cephalon (CEPH): Reduced by 26%
Coca Cola (KO): Reduced by 20%
Mastercard (MA): Reduced by 19%
Anadarko Petroleum (APC): Reduced by 14%


Removed Positions (Positions it sold out of completely)
Anheuser Busch (AHBIF.PK), Merill Lynch (MER) Calls & Puts, Symantec (SYMC), Procter & Gamble (PG) Puts, CA (CA), DRS Tech (inactive), Imclone (IMCL), Prudential (PRU) Bond, Allied Waste (AW), SLM (SLM), Lehman Brothers (LEH) 7.25% Preferred, Nabors (NBR) Note, Autozone (AZO), Invitrogen (IVGN), Mylan (MYL), Anheuser Busch (AHBIF.PK) Calls, Everest RE group (RE), Wrigley (inactive), Nationwide Health (NHP), Barr Pharma (BRL), Coca Cola (KO) Puts, Hutchinson Tech (HTCH) Note, Best Buy (BBY), Brookfield Asset Management (BAM), Developers Diversified (DDR), Kimco (KIM), Grey Wolf (GW), & Sierra Pacific.


Top 15 Holdings (by % of portfolio)

1. Endo Pharma (ENDP): 1.25% of portfolio
2. Vertex Pharma (VRTX): 1.23% of portfolio
3. Warner Chilcott (WCRX): 1.19% of portfolio
4. Pfizer (PFE): 0.97% of portfolio
5. Goldman Sachs (GS) Calls: 0.9% of portfolio
6. Google (GOOG) Calls: 0.87% of portfolio
7. Mylan (MYL): 0.87% of portfolio
8. Owens Corning (OC): 0.83% of portfolio
9. Qualcomm (QCOM): 0.8% of portfolio
10. Walmart (WMT): 0.78% of portfolio
11. Mastercard (MA) Calls: 0.72% of portfolio
12. Anadarko Petroleum (APC): 0.67% of portfolio
13. AvalonBay Communities (AVB): 0.64% of portfolio
14. Davita (DVA): 0.6% of portfolio
15. Coca Cola (KO) Calls: 0.6% of portfolio

Again, please keep in mind that since Shaw is quant in nature, we aren't going to attempt to explain the rationale behind its holdings. Also note that it literally holds a ton of positions. After all, its top holding makes up ony 1.25% of its entire portfolio.

This is just one of many funds in our hedge fund portfolio tracking series where we're tracking 35+ funds . We've already covered:

• Well known gurus such as: Carl Icahn, Warren Buffett, & George Soros
• 'Tiger Cub' portfolios: Stephen Mandel's Lone Pine Capital, Andreas Halvorsen's Viking Global, Lee Ainslie's Maverick Capital, Chase Coleman's Tiger Global, Chris Shumway's Shumway Capital Partners, Touradji Capital Management (Paul Touradji), and John Griffin's Blue Ridge Capital
• Global macro giants: Bruce Kovner's Caxton Associates, Louis Bacon's Moore Capital Management, Peter Thiel's Clarium Capital, & Paul Tudor Jones' Tudor Investment Corp
  
• Value & Activist players like: Bill Ackman's Pershing Square, Seth Klarman's Baupost Group, John Burbank's Passport Capital, Philip Falcone's Harbinger Capital Partners, Art Samberg's Pequot Capital, & David Einhorn's Greenlight Capital
• Concentrated portfolios like: Bret Barakett's Tremblant Capital, & Timothy Barakett's Atticus Capital
• Some solid names: Paulson & Co (John Paulson), Raj Rajaratnam's Galleon Group, Thomas Steyer's Farallon Capital Management, and Eric Mindich's Eton Park Capital
• Newer funds on the scene: James Pallotta's Raptor Capital Management, Anand Parekh's Alyeska Investment Group, Stanley Shopkorn's Hilltop Park Fund (no 13F yet) & David Stemerman's Conatus Capital
• Troubled funds: Jeffrey Gendell's Tontine Associates
• Quant & high frequency trading funds (purely for fun/entertainment): Jim Simons' Renaissance Technologies (Rentec), David Shaw's D.E. Shaw & Co, Steven Cohen's SAC Capital

We cover a new hedge fund each day and you can see the complete list of hedge fund portfolios here.

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Comments

[winindthedust:]

He's going to lose his shirt on those Apple Puts... very risky to Put Apple right now.... good for us that are long, though.

Most of his Calls and increased positions look pretty solid, though.

Apr 22 10:57 AM

[mysteryleo:]

the increase in aapl is smart. Even after its runup, the stock still looks like it's in a good long-term trend:
www.traderbots.com/sto...

DE Shaw is always smart

May 03 08:09 AM