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Ervin Shindell co-founded Roundkeep Capital Advisors with three other partners in late 2009. Prior to founding Roundkeep, Mr. Shindell had 10 years of service at Citadel Investment Group as a trader and Senior Managing Director. During his last 5 years at Citadel, Mr. Shindell served as the head of the global event-driven team. The team's investments focused mainly on North America and Europe and placed bets for risk-arbitrage opportunities in the mergers and acquisitions area.

According to the 13F filed by Roundkeep, we see 12 securities removed and 26 new securities added to the portfolio in the first quarter of 2011. Here are the recent portfolio activities of Roundkeep:

Company Name

Ticker

Value

Activity

Return

AIRGAS INC CALLS

ARG

Sold Out

-0.2%

AIRGAS INC

ARG

Sold Out

-0.2%

B J S WHOLESALE CALLS

BJ

Sold Out

-1.5%

B J S WHOLESALE PUTS

BJ

Sold Out

-1.5%

DEL MONTE FOODS CO

DLM

Sold Out

NA

LADISH INC

LDSH

Sold Out

2.8%

MCAFEE INC CALLS

MFE

Sold Out

NA

NATIONAL FUEL GAS CO N J

NFG

Sold Out

-9.2%

NOVELL INC

NOVL

Sold Out

2.9%

SECTOR SPDR TRUST PUTS

XLV

Sold Out

5.6%

SECTOR SPDR TRUST PUTS

XLK

Sold Out

-4.9%

SYNIVERSE HOLDINGS INC

SVR

Sold Out

0.0%

SUNPOWER CORP

SPWRB

3330

-75.9%

26.1%

SPDR S & P 500 ETF PUTS

SPY

155727

155.3%

-3.7%

B J S WHOLESALE CLUB

BJ

12268

New

-1.5%

BIG LOTS INC

BIG

14850

New

-25.7%

C N A SURETY CORP

SUR

2523

New

5.0%

C V R ENERGY

CVI

1016

New

-7.3%

CENTURYLINK INC

CTL

45082

New

-2.4%

CLINICAL DATA INC NEW

CLDA

6060

New

2.1%

CLINICAL DATA INC PUTS

CLDA

6060

New

2.1%

DARLING INTERNATIONAL INC

DAR

24354

New

17.6%

GENZYME CORP CALLS

GENZ

115832

New

0.1%

GETTY REALTY CORP CALLS

GTY

3432

New

7.9%

H S N INC NEW

HSNI

8228

New

-1.2%

HUMANA INC PUTS

HUM

4896

New

11.8%

IRON MOUNTAIN INC

IRM

57588

New

3.3%

ISHARES INC PUTS

EWT

35894

New

1.8%

LORILLARD INC CALLS

LO

17814

New

8.1%

LUBRIZOL CORP

LZ

66846

New

0.4%

MARATHON OIL CORP

MRO

40356

New

-6.1%

MARKET VECTORS E T F PUTS

MOO

17372

New

-6.5%

MARSHALL & ILSLEY CORP

MI

97230

New

-3.8%

RETAIL HOLDRS TRUST PUTS

RTH

38679

New

-1.4%

RETAIL VENTURES INC

RVI

1898

New

28.3%

SECTOR SPDR TRUST PUTS

XLY

9763

New

-3.2%

SECTOR SPDR TRUST PUTS

XLF

8359

New

-8.6%

T C F FINANCIAL CORP

TCB

11419

New

-13.5%

UNIVERSAL AMERICAN CORP

UAM

17475

New

-55.6%

WALTER ENERGY INC

WLT

6772

New

-17.3%

During the first quarter Roundkeep sold three quarters of its Sunpower Corp holdings. Unfortunately the stock gained more than 26% since the end of March. On the other hand Roundkeep increased its SPY puts by almost $100 million which was a very shrewd move.

Roundkeep's portfolio activities reveal that it is pursuing a merger arbitrage strategy. Roundkeep also uses options extensively to limit or magnify certain bets. Roundkeep initiated a $6 million position in Clinical Data Inc., which was sold to Forest Laboratories back in March for $30 a share (approximately $1.2 billion equity value). The stock has gained 2.1% in value since the end of March. Robert Zoellner's Alpine Associates had $30 million in CLDA at the end of March. Interestingly Steve Cohen's SAC Capital has $7.5 million in CLDA put options (See Steve Cohen's favorite stock picks here).

Roundkeep also tried to benefit from Sanofi-Genzyme merger by investing approximately $116 million in a Genzyme call option (14% of its aggregate portfolio value) but has been disappointed with the trivial return of 0.1% since the end of March. Sanofi acquired Genzyme in April 2011.

Roundkeep also took a significant position in Marshall & Ilsley Corp. where it bought $97 million worth of common shares during the first quarter of 2011. Marshall & Ilsley Bank was acquired by Bank of Montreal back in April in a stock-for-stock deal valued at $4.1 billion. MI was also a disappointment for Roundkeep as it returned negative 4% since March-end. John Paulson also bet more than $100 million on MI (See John Paulson's top positions)

Another security that Roundkeep took a significant position in is Lubrizol Corp. where Roundkeep bet $67 million on Lubrizol's common shares. Warren Buffet's Berkshire Hathaway had announced its intention to acquire Lubrizol for $135 a share back in March (approximately $9 billion equity value). The deal is expected to be closed by December 31 after necessary approvals are secured from the regulatory authorities. Lubrizol had a lackluster return of 0.4% since the end of March.

Aside from a couple of exceptions, Roundkeep made some very disappointing bets during the first quarter of 2011. The only deals that probably made the faces smile at Roundkeep were Darling International, where Roundkeep held $24 million in common shares and Lorillard Inc. where Roundkeep held $18 million in call options. The securities have returned 17.6% and 8.1% since the end of March, respectively. Jim Simons' Renaissance is the largest hedge fund in LO with a $257 million position (Check out Jim Simons' biggest bets here).

Roundkeep's strategy is a low risk low return strategy and should be compared to bond yields rather than the S&P 500 index. Merger arbitrage delivers better returns than treasuries and following Roundkeep's transactions may tell investors which M&A transactions are likely to close and yield higher returns.

Source: Roundkeep Capital's Favorite Stock Picks