Perry Partners Updates on GM, Managed Care and Palm Holdings

Includes: DPH, MTLQQ, PALM
by: Market Folly

Below you will find the annual letter from Richard Perry's hedge fund Perry Partners International. Perry seeks to achieve low correlations to the equity markets while still delivering strong returns. Perry Partners' annual letter focuses both on its performance from the past year as well as its outlook going forward. Turning to some of the fund's specific positions, we see that it has been active in both the credit and equity arenas.


Perry built a position in General Motors (OTC:MTLQQ) unsecured bonds, GM corporate bonds (issued by the parent entity) and GM Nova Scotia bonds over the past few quarters. The fund also purchased claims in Delphi (DPH) late in the bankruptcy process. Perry also made a lot of investments in the auto and auto parts sector as it felt the potential upside far outweighed the downside.


Perry has been fond of managed care stocks but has scaled back its positions slightly to lock in gains. Managed care is still 5% of its portfolio, however. The fund was also adding to its Palm (PALM) position on the fourth quarter sell-off. Perry believes Palm

has an excellent operating system and will continue to gain traction with the carriers. That being said, our fears around competitive pricing in the smartphone area led us to increase some of our hedges in this area.

This is interesting as we've now seen Perry long Palm, and we had previously seen Whitney Tilson's hedge fund T2 Partners had been short Palm.

Perry Partners' investor letter in its entirety is a must-read.

Great insight from Perry Partners and we look forward to following the developments of some of its positions. In the past, we had presented Perry's second quarter 2009 letter as well, so it's good to see its more updated insight. We've been posting a ton of hedge fund investor letters as of late, so make sure to check those out.

Original article