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A "guru" is defined as someone who is regarded as having great knowledge, wisdom, and authority in a certain area. When it comes to hedge funds, there are a number of ways to anoint leading managers as Gurus including long-term performance, low portfolio volatility and an elite reputation in the investment community.
Many of us are familiar with leading investors and hedge fund managers such as Warren Buffet, George Soros, Carl Icahn and Julian Robertson, but the hedge fund community alone includes over 9,000 funds; add in mutual funds, ETFs, and other investment entities and the number is likely to be at least two to three times that number. While there is no official list of Hedge Fund Gurus, less than one percent or between 100 to 200 fund managers are commonly believed by the larger investment community to have earned the distinction of being called "gurus".
The study of guru investing habits can be informative as these are very savvy, well-respected investors with high personal net worth deploying large sums of capital from their funds on a regular basis. They have a long-term track record of success, and while one can easily just ride their coattails, the more savvy investor may want to use these lists as a starting point to conduct their own due diligence.
This article focusing on the Utilities sector of the economy is the second in a series of articles that through a meticulous research of the latest available institutional 13-F filings identifies which Gurus are concentrated in various sectors of the economy and the stocks within those sectors that they own in their portfolios (the first one I wrote was on Hedge Fund Gurus concentrating on Solar).
The total capitalization of the US Equity markets is somewhere in the $15 trillion range, and the total market capitalization of leading Utility stocks is approximately $700 billion or 4.7% of the overall market. The following is a list of five Hedge Fund Gurus whose funds have invested more than 6% in the Utilities sector. The Utility stocks they are invested in include the following:
  • Electrical utilities providers such as Exelon Corp. (NYSE:EXC), PPL Corporation (NYSE:PPL), American Electric Power (NYSE:AEP), Genon Energy (GEN), and Dynegy (NYSE:DYN).
  • Gas utility providers such as Public Service Enterprise Group (NYSE:PEG),
  • Utilities such as Centerpoint Energy Inc. (NYSE:CNP) and CMS Energy Corp. (NYSE:CMS) that provide both electricity and gas utilities
  • Foreign Utilities providers such as Britain based National Grid PLC ADR (NYSE:NGG) and Korea Electric Power ADR (NYSE:KEP).
Table
Fund and Guru
Type of Fund
And Strategy
Assets Under Management
Percent Portfolio in Utilities
Utility Stocks in Portfolio
Donald Smith & Co., Inc. (Donald G. Smith)
Hedge Fund – Deep Value
$ 3.2 billion
9.4%
GEN, CEG, KEP, NVE, PNW, IDA
Jana Partners LLC (Barry S. Rosenstein)
Hedge Fund – Event Driven
$ 1.9 billion
6.4%
EE and NFG
GAMCO Investors, Inc. Et Al (Mario Gabelli)
Hedge Fund –Shareholder Activist
$ 13.6 billion
6.2%
EXC, PPL, PEG, EIX, NEE, GXP, WR, POR
BP Capital Management LP (T Boone Pickens)
Hedge Fund – Energy Focused
$ 321 million
6.0%
DYN and NGG
Duquesne Capital Management, LLC (Stanley Druckenmiller)
Hedge Fund – Multi-Strategy
$ 1.9 billion
5.1%
CNP, PPL, AEP, EIX, CMS, NRG, ETR, GXP, NVE, EQT, PNW, POR
With total assets under management (AUM) of $3.2 billion, hedge fund Donald Smith & Co., Inc., headed by Guru Donald G. Smith was founded 30 years ago and invests in out-of-favor companies selling in the bottom decile of price-to-tangible book value ratios, and that have significant earnings potential over the next 2-4 years.
Jana Partners LLC, a hedge fund co-founded by Barry S. Rosenstein in 2001 with partner Gary Claar, invests in event-driven strategies, meaning that the fund finds opportunity in corporate transactional events such as consolidations, acquisitions, recapitalizations, bankruptcies and liquidations in selecting its investments.
GAMCO Investors, Inc., headed by Mario Gabelli, uses a growth at a reasonable price (GARP) approach in making his stock picks. Besides his hedge fund, GAMCO Asset Management with over $30 billion in AUM also manages the GAMCO family of mutual funds.
Duquesne Capital Management, LLC, headed by CEO Stanley Druckenmiller, was founded in 1981 and is a multi-strategy hedge fund, employing both global macro and long/short strategies.
Credit: Historical fundamentals including operating metrics and stock ownership information were derived using I-Metrix® by Edgar Online®, Zacks Investment Research, Thomson Reuters and Briefing.com.



Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: Top Hedge Fund Gurus Focused on Utilities