Phil Falcone's Harbinger Capital Shows Massive New Citigroup Position

by: Market Folly

(This post is part of our series on tracking hedge fund portfolios. If you're unfamiliar with tracking investments they disclose via SEC filings, check out our series preface on hedge fund filings.)

Next up is Philip Falcone's hedge fund Harbinger Capital Partners. Harbinger is a multi-billion dollar hedge fund firm with a focus on both distressed assets and equity plays. It often takes highly concentrated positions and so it's an easier fund to track. After horrible performance in 2008, Harbinger rebounded in 2009 and finished up 46.5% as noted in our hedge fund performances post. In terms of recent portfolio activity, we detailed Harbinger's new position in African Medical Investments and saw that it has been selling New York Times shares. Falcone's firm has actually been quite active and ambitious as of late as we learned it will be starting a 4G wireless network as the firm make a large bet on mobile data transmission.

The positions listed below were Harbinger's long equity, note, and options holdings as of March 31st, 2010, as filed with the SEC. All holdings are common stock unless otherwise denoted:

Brand New Positions

  • Citigroup (NYSE:C)
  • NRG Energy (NYSE:NRG)
  • Bunge (NYSE:BG)
  • Seagate (NASDAQ:STX)
  • Trina Solar (NYSE:TSL)
  • Consol Energy (NYSE:CNX)
  • VIX Short-term Futures (NYSEARCA:VXX)
  • Harbinger Group (NYSE:HRG)
  • Vantage Drilling (NYSEMKT:VTG)
  • Clearwire (CLWR)
  • Pioneer Drilling (PDC)
  • Calpine (NYSE:CPN) Calls

Increased Positions

  • Strategic HL & RS (NYSE:BEE): Increased position size by 252.8%
  • SPDR Gold (NYSEARCA:GLD): Increased by 145%
  • Corn Products (CPO): Increased by 141.9%
  • Exco Resources (NYSE:XCO): Increased by 75.7%
  • Superior Well Service (SWSI): Increased by 33.6%

Reduced Positions

  • Harry Winston (HWD): Reduced by 60.1%
  • Istar Financial (SFI): Reduced by 54%
  • Sprint (NYSE:S): Reduced by 33.8%
  • Freeport McMoran (NYSE:FCX): Reduced by 11.8%

Positions It Sold Out of Completely

  • Calpine (CPN)
  • Walter Energy (NYSE:WLT)
  • Interpublic (NYSE:IPG)
  • Take-Two Interactive (NASDAQ:TTWO)
  • Cloud Peak (NYSE:CLD)
  • ProShares Ultrashort Financials (NYSEARCA:SKF)
  • Alpha Natural Resources (ANR)
  • August Resource (NYSEMKT:AZC)
  • MGIC Investments (NYSE:MTG)
  • Delta Petroleum (DPTR) Notes

Top 15 Holdings (by percentage of assets reported on 13F filing)

  1. Citigroup (C): 15.2%
  2. Sprint (S): 10.1%
  3. New York Times (NYSE:NYT): 10%
  4. NRG Energy (NRG): 8.5%
  5. SPDR Gold (GLD): 7.2%
  6. Exco Resources (XCO): 6.9%
  7. Corn Products (CPO): 6.5%
  8. Bunge (BG): 5.2%
  9. Complete Production (NYSE:CPX): 4.6%
  10. Calpine (CPN) Calls: 4%
  11. Freeport McMoran (FCX): 3.4%
  12. US Airways (LCC): 3.2%
  13. Terrestar (TSTR): 2.2%
  14. Seagate (STX): 2%
  15. Trina Solar (TSL): 1.7%

Please keep in mind that these equity holdings are by no means representative of Harbinger's entire portfolio. It undoubtedly also hold numerous distressed plays and positions in other markets that aren't required to be disclosed. That said, we do get an interesting look at some of the fund's long US equities exposure which totals $1.9 billion.

Harbinger started a few massive new long positions in the first quarter, most notably in Citigroup and NRG Energy. It also disposed of longstanding stakes in Calpine, Walter Energy, and Take-Two Interactive. The latter is interesting because we've seen corporate activist Carl Icahn adding TTWO shares and actively trying to drum up shareholder value. And while Harbinger sold completely out of CPN common stock, it also added a new position in CPN call options so they still have some exposure there.

One interesting talking point is Harbinger's use of exchange traded funds presumably as hedging tools. It has held a position in SPDR Gold Trust (GLD) for a while but heavily added to it in the first quarter. The fund also started a brand new stake in VXX, an ETF based on the volatility index (VIX). As volatility increases (as it definitely has as of late), VXX increases in value. In essence, Harbinger is looking for hedges against panic and for assets that might increase when equity markets are declining.

Lastly, we highlight Harbinger's continued stake in numerous natural resource plays. It has owned and has been in and out of various plays but seemingly likes Freeport McMoran and Cliffs Resources the best.

Assets reported on the 13F filing were $1.9 billion this quarter. Data from the SEC is aggregated and sorted automatically by Alphaclone, our source for hedge fund tracking, replicating, and performance backtesting. Remember that these filings are not representative of the hedge fund's entire base of AUM.

This post is part of our daily hedge fund portfolio tracking series. We've already detailed activity from numerous managers so click the links below to be taken to the respective portfolio updates: Seth Klarman's Baupost Group, Warren Buffett's Berkshire Hathaway, Stephen Mandel's Lone Pine Capital, and Bill Ackman's Pershing Square, David Einhorn's Greenlight Capital, Eddie Lampert's RBS Partners, David Tepper's Appaloosa Management, Mohnish Pabrai's Investment Fund, John Griffin's Blue Ridge Capital, Lee Ainslie's Maverick Capital, Bruce Berkowitz's Fairholme Capital Management, Andreas Halvorsen's Viking Global, Dan Loeb's Third Point, John Paulson's hedge fund Paulson & Co, Chase Coleman's Tiger Global, and Roberto Mignone's Bridger Management. Be sure to check back daily for new hedge fund updates.

Original post

Disclosure: No positions

About this article:

Problem with this article? Please tell us. Disagree with this article? .