Kyle Bass is the founder and principal of Hayman Advisors LP, which was formed in December 2005. Prior to founding Hayman Advisors, Mr. Bass worked as a Senior Managing Director at Bear Stearns and a Managing Director at Legg Mason. Mr. Bass graduated from Texas Christian University in 1992 with a Bachelor of Business Administration in Finance and Real Estate Finance.
According to the latest 13F, Hayman Advisors had a total of 20 securities in its portfolio, which was valued at $588 million on March 31, 2011. The value of Hayman’s portfolio rose dramatically since the previous quarter (4Q2010), when it held a total of 14 stocks valued at approximately $340 million on December 31, 2010. Hayman has sold out on 8 positions and added 14 new positions to its portfolio during the first quarter of 2011. A summary table of Hayman’s recent activities is below:
CompanyName | Ticker | Value | Activity | Return |
ARIAD PHARMACEUTICALS INC |
| Sold Out | 5.2% | |
BANK OF AMERICA CORP |
| Sold Out | -18.7% | |
ELECTRONIC ARTS INC | ERTS |
| Sold Out | 21.9% |
H F F INC |
| Sold Out | -2.5% | |
K K R & CO L P |
| Sold Out | 1.0% | |
MACYS INC |
| Sold Out | 11.1% | |
PHILLIPS VAN HEUSEN CORP |
| Sold Out | -2.4% | |
SPDR S & P 500 ETF PUTS |
| Sold Out | -2.7% | |
SIX FLAGS ENTERTAINMENT | 21557 | 0 | 5.2% | |
ROYAL BANK SCOTLAND CL4 | 7868 | 14.76% | 4.4% | |
GRUBB & ELLIS CO | GBE | 1600 | 33.33% | -31.3% |
ROYAL BANK SCOTLAND CL1 | 3894 | 50.45% | 4.4% | |
ROYAL BANK SCOTLAND CL2 | 13252 | 265.84% | 4.4% | |
ROYAL BANK SCOTLAND CL3 | 7894 | 348.30% | 4.4% | |
APACHE CORP | 12372 | New | -10.4% | |
BARNES & NOBLE INC | 5514 | New | 99.1% | |
BRIDGEPOINT EDUCATION INC | 7131 | New | 44.9% | |
C V R ENERGY | 8106 | New | -13.3% | |
CHEMTURA CORP | 11180 | New | 4.6% | |
DRUGSTORE COM INC | 7290 | New | -1.6% | |
EARTHLINK INC | 9788 | New | -2.8% | |
IMMERSION CORP | 10436 | New | 4.1% | |
ISHARES TRUST RUSS 2000 PUTS | 437684 | New | -5.5% | |
ROYAL BANK SCOTLAND CL5 | 4378 | New | 4.4% | |
ROYAL BANK SCOTLAND CL6 | 1837 | New | 4.4% | |
VERA BRADLEY INC | 10477 | New | -4.8% | |
DIANA SHIPPING INC | 4736 | New | -8.4% | |
DIANA CONTAINERSHIPS, INC. | 779 | New | -26.1% |
Among the securities it sold, Hayman’s biggest regret was probably Electronic Arts Inc. (ERTS). It held 450,000 shares in the previous quarter valued at $7.3 million. The stock has returned almost 22% since the end of March 2011. The stocks that Bass sold actually outperformed the market since the end of first quarter.
Hayman has been bullish for Royal Bank of Scotland (RBS) in the first quarter of 2011, when it increased its long positions in the stock considerably. Luckily, the stock proved Hayman to be right and gained over 4% in value since March's end. RBS was recently trading at $13.26 a share.
Among its new positions, Hayman bought a put option of iShares TR Russell 2000 (IWM) and the value of this put option was nearly 75% of Hayman’s aggregate portfolio value at the end of the first quarter. Hayman made a good bet as the ETF lost 5.5% in value since March 31.
The greatest returns Hayman generated on its long positions were in Barnes & Noble (BKS) and BridgePoint Education (BPI), which have generated 99% and 45% returns since the end of March 2011, respectively. Peter Eichler’s Aletheia Research and Management and Patrick McCormack’s Tiger Consumer Management were among the bullish funds for BKS in the first quarter of 2011. On BPI’s side, we see position enhancements in Edward Mule’s Silver Point Capital and Geoffrey McCuskey’s Riverside Advisors.
While Hayman made good returns on a couple of new positions, it also incurred losses of above 10% on some of its new purchases. Hayman lost 13.3% on CVR Energy (CVI) and 10.4% on Apache Corp (APA) since March 31, 2011. Both stocks collectively comprised approximately 3.5% of Hayman’s portfolio as of March 31. While Hayman was bullish on APA during the first quarter of 2011, we saw some slight trim offs in other funds. First Eagle Investment Management, Harris Associates, and Diamond Hill Capital were among the funds that trimmed their APA assets in the first quarter of 2011. On CPI’s side, Dan Loeb’s Third Point was another fund that was disappointed with the performance of the stock. Third Point had increased its position on CPI by 3.5% in the first quarter.
Overall, Hayman performed better than the market because of its huge put option on IWM. Hayman also performed well on a number of stocks where it held considerable long positions. We believe that investors can beat the S&P 500 (SPY) index by imitating Hayman’s stock picks.
