Moore Capital Management was founded in 1989. It is based in New York, with offices in Washington, D.C., and London. Louis Moore Bacon is the founder and CEO of the company. Bacon has a MBA degree from Columbia Business School. Bacon specializes in taking macroeconomic bets on currencies and bonds. During the first year of foundation, he achieved 89% return by correctly predicting the effects of Gulf war on oil prices. Bacon had a net worth of $1.5 Billion as of March 2010. Bacon has been at the top 20 ranking of Top 100 money earners since the 1990s. According to institutionalinvestors.com, Bacon had made $11.5 Billion profit since inception and ranks 8th among hedge fund managers.
Bacon’s portfolio has a high turnover rate. It was 209.8% in March 2010.The firm invests in public equity and fixed income securities across the globe. It employs a global macro-style approach to investing. Approximately 65% of investments are in North America and rest of it in Latin America and Europe.
Between 1990 and 2004 Bacon claims to have returned 24% annually net of fees with 13% volatility. In 2010 Moore Global Investments, which has $7.6 Billion AUM, returned only 3%.
Louis Bacon has a minimum initial purchase limit of $1 Million for investors. For the Macro Managers Fund, Bacon charges a 25% performance fee and 3% in management fees. For the Emerging Markets Fund, he charges a 20% performance and 1% management fee. The Emerging markets fund returned 0.35% during 2010 and had an 11.42% five year annualized return.
Bacon has about $15 Billion AUM in total. In US equity he has $4.5 Billion invested. At the end of December he owned 333 stocks. Eight of the ten largest positions of Bacon’s investments are Exchange Traded Funds. Below are the 20 largest positions at the end of December:
1. iShares MSCI Brazil Index (EWZ): EWZ is an Exchange Traded Fund that invests in large-cap stocks following a value investment strategy. Bacon had $277 Million worth of EWZ at the end of December. The stock lost 3.3% since then. EWZ was added to the portfolio during the third quarter and gained 0.4% since then. During the last quarter, EWZ holdings increased by 138.6%. Bacon had $155 Million worth of call options and $115 Million worth of put options on EWZ.
2. Alcon Inc. (ACL): Moore Capital has been holding $228 Million worth of ACL shares for almost a year. ACL returned 4.9% during this time. Last quarter, Bacon increased his ACL holdings by 503% and it returned 1.2% since then, better than treasury bills. Bacon also had $20 Million worth of call options for ACL. John Burbank’s Passport Capital, Tom Steyer’s Farallon, Jim Simons’ Renaissance, and Dan Loeb’s Third Point were invested in this merger arbitrage play. Richard Perry’s Perry Capital sold all its ACL holdings during fourth quarter.
3. Energy Select Sector SPDR (XLE): Bacon had $223 Million invested in XLE. This pick returned 12.8% since the end of December, outperforming the SPY by 8 percentage points. Bacon added XLE to his portfolio during the last quarter. Bacon had $54 Million worth of call and $154 Million worth of put options on XLE.
4. PowerShares QQQ (QQQQ): Powershares QQQ is an Exchange Traded Fund invests in large growth shares. Moore Capital held $203 Million QQQQ shares on December 31st 2010, added during the fourth quarter of 2010. It returned 4.7% since then, almost equal to SPY. Most of QQQQ position is composed of call options.
5. Citigroup, Inc. (C): C is the second most popular stock among hedge fund managers. Moore Capital had $194 Million worth of C at the end of December, it returned -0.8% since then. Bacon bought Citigroup shares during the last quarter of 2010. There are 190 hedge funds with Citigroup holdings. Steven Mandel’s Lone Pine, Bruce Berkowitz’s Fairholme, Lee Ainslie’s Maverick Capital, Bill Miller’s Legg Mason Capital Management, William Ackman’s Pershing Square, George Soros, David Tepper’s Appaloosa, Daniel Loeb’s Third Point, Andreas Halvorsen’s Viking Global, Richard Perry’s Perry Capital, Joseph DiMenna’s Zweig-DiMenna, Leon Cooperman’s Omega Advisors, Brevan Howard, and John Paulson’s Paulson & Co are among the prominent hedge funds who are bullish about Citigroup.
6. iShares MSCI Emerging Markets Index (EEM): Louis Bacon invested $154 Million of EEM during the fourth quarter. Stock lost 5.9% since the end of December, underperformed the SPY by 10.7 percentage points. George Soros bought put options on EEM during the fourth quarter.
7. SPDR KBW Bank (KBE): KBE is an ETF that invests in large-cap value stocks. Louis Bacon had $142 Million invested in KBE at the end of December. It returned 2.2% since then, underperforming the SPY by 2.6 percentage points. Bacon added KBE to his portfolio during the last quarter. He had $33 Million worth of call options for KBE.
8. iShares FTSE China 25 Index Fund (FXI): FXI lost 4.4% since the end of December. Bacon had $129 Million invested in FXI and stock holdings are reduced by 49% during the last quarter. Bacon had FXI investment since June and stock has returned 5.7% since then.
9. Financial Select Sector SPDR (XLF): Moore Capital owned $122 Million XLF shares during the last quarter of 2010. It returned 4.4% since then. Bacon also had $85 Million worth of call options for XLF.
10. Oil Services HOLDRs (OIH): Bacon invested $104 Million during the last quarter of 2010. OIH returned 14.2% since the end of December.
11. Assured Guaranty Ltd. (AGO): Louis Bacon had $92 Million in AGO at the end of December. Stock holdings increased by 42% during the last quarter of 2010. It lost 12.2% since then. Bacon added AGO to his portfolio during the 3rd quarter of 2010. Stock lost 9% since the end of September.
12. Genzyme Corp. (GENZ): GENZ is added to Bacon’s portfolio during the third quarter. Stock returned 6.4% since September. Bacon increased his stock holdings by 70% during the last quarter. Stock returned 5.8% since then, outperforming the SPY by a percentage point.
13. Plains Exploration & Production Company (PXP): Bacon had $82 Million worth of PXP investment since September. It returned 45.1% and outperformed SPY’s 16.1% during the 5-month period. Stock holdings were increased by 168% during the last quarter of 2010. It returned 20.4% since then. Bacon also had $40 Million worth of put options.
14. Sprott Physical Gold Trust ETV (PHYS): Moore Capital had $69 Million in PHYS shares at the end of December. It returned 0.4% since then, underperforming the SPY by4.4 percentage points. Stock holdings are almost unchanged during the last quarter. Bacon added PHYS to his portfolio during the third quarter and it returned 8.9% since the end of September.
15. Dollar Thrifty Automotive Group Inc. (DTG): Moore Capital’s $59 Million investment in DTG returned 5.6% since the end of September, underperforming the SPY by 10.5 percentage points. Bacon increased his DTG holdings by 455% during the last quarter. It returned 12% since then. He had $10 Million worth of call options. Roberto Mignone's Bridger Management also bought DTG shares during the third quarter.
16. McAfee, Inc. (MFE): Louis Bacon had $55 Million worth of MFE shares. Stock returned 56.1% since June, and outperformed the market by a huge margin. During the fourth quarter of 2010, Bacon increased his MFE holdings by 47.5%. Since then it returned 3.6%.
17. Xcel Energy Inc. (XEL): Bacon invested $55 Million in XEL during the last quarter. Stock returned 0.3% since the end of December.
18. Market Vectors Agribusiness ETF (MOO): Bacon had $54 Million in MOO at the end of December. The stock gained 20% since the end of September. Stock holdings were reduced by 14.2% during the last quarter. Since then it returned 2.1%.
19. Alterra Capital Holdings Limited (ALTE): Moore Capital had $50 Million of ALTE shares at the end of December. ALTE has gained 16.5% since the end of June. Bacon kept his ALTE holdings the same in the fourth quarter of 2010. Since then the stock lost 0.2%.
20. AngloGold Ashanti Ltd. (AU): Bacon had $44 Million of AU at the end of December. The stock returned 3.5% during the last 5 months. Bacon reduced his AU holdings by 82% during the fourth quarter of 2010. That was a timely move. AU returned -2.7% since then. John Paulson is also an AU investor.
The weighted average return of Bacon’s top 20 holdings is 2.4% since the end of December. The (SPY) returned 4.8%.
Disclosure: I am long C, SPY.