Moore Capital Is Buying: China, Financials and Consumer Staples

by: Todd Walker

Louis Bacon’s Moore Capital Management bought up equities over the second quarter of 2009, according to the most recent portfolio holdings of the global macro orientated growth investor. Overall, the hedge fund manager’s exposure to US traded equities rose to $1,158 million as of 6/30/2009 from just $510 million as of 3/31/2009.

Moore Capital’s largest purchase was a new $274.3mm / 7,150,000 share position in the iShares FTSE/Xinhua China 25 (NYSEARCA:FXI) ETF, which invests in the top 25 largest companies in the China equity market that are available to international investors. The other Chinese equity position in the firm’s portfolio was energy giant China Petroleum & Chemical Corp “Sinopec” (NYSE:SNP). In Sinopec, the firm trimmed its position by 40,000 shares over the second quarter, resulting in an quarter end position of $9.9mm / 130,000 shares.

Moore Capital’s portfolio heavily favored financial stocks, which represented over 41% of the firm’s portfolio. The second largest purchase over the quarter was a new $264.7mm / 20,050,000 share position in Bank of America (NYSE:BAC). The other top financial sector holdings in the hedge fund’s portfolio included:

  • Max Capital Group Ltd (MXGL) - $43.1mm, 2,333,334 shares, 4.1% held
  • Wells Fargo & Co (NYSE:WFC) - $36.4mm, 1,500,000 shares, 0.0% held, Change: $36.4mm / 1,500,000 shares
  • CIT Group Inc (NYSE:CIT) - $36.2mm, 16,827,100 shares, 4.3% held, Change: $36.2mm / 16,827,100 shares
  • Goldman Sachs Group Inc (NYSE:GS) - $32.6mm, 220,900 shares, 0.0% held, Change: $32.6mm / 220,900 shares
  • Assured Guaranty Ltd (NYSE:AGO) - $25.6mm, 2,070,000 shares, 1.3% held, Change: $25.6mm / 2,070,000 shares, Sector: Financials
  • J P Morgan Chase (NYSE:JPM) - $17.1mm, 500,000 shares, 0.0% held, Change: $17.1mm / 500,000 shares
  • Northern Trust Corp (NASDAQ:NTRS) - $16.1mm, 300,000 shares, 0.1% held, Change: $16.1mm / 300,000 shares

The next largest exposure, representing almost 14% of the portfolio, was the Consumer Staples sector. Moore Capital’s sector holdings were concentrated in three positions:

  • Philip Morris International Inc. (NYSE:PM) - $56.7mm, 1,300,000 shares, 0.1% held, Change: $56.7mm / 1,300,000 shares
  • Market Vectors Agribusiness ETF (NYSEARCA:MOO) - $56.0mm, 1,625,000 shares, 6.6% held, Change: $56.0mm / 1,625,000 shares
  • Coca Cola Co (NYSE:KO) - $48.0mm, 1,000,000 shares, 0.0% held, Change: $48.0mm / 1,000,000 shares

As far as selling activity went, Moore Capital’s largest sell was the SPDR Energy Sector (NYSEARCA:XLE) ETF. The firm sold -$74.6mm or -1,553,300 shares, bringing its holdings in XLE down to $43.9mm or 912,700 shares. The firm’s other top sells were sold completely from its portfolio, including:

  • ACE Ltd (NYSE:ACE) - Change: -$68.3mm / -1,690,000 shares, Sector: Financials
  • Lorillard Inc (NYSE:LO) - Change: -$21.8mm / -352,786 shares, Sector: Consumer Staples
  • United Technologies Corp (NYSE:UTX) - Change: -$19.3mm / -450,000 shares, Sector: Conglomerates
  • China Mobile (Hong Kong) Ltd ADR (NYSE:CHL) - Change: -$14.1mm / -325,000 shares, Sector: Information Technology
  • Metlife Inc (NYSE:MET) - Change: -$13.7mm / -600,000 shares, Sector: Financials

Other top holdings that were not mentioned above include:

  • Wyeth (WYE) - $43.1mm, 950,000 shares, 0.1% held, Change: $12.5mm / 275,000 shares, Sector: Health Care
  • Merck & Co Inc (NYSE:MRK) - $17.6mm, 630,000 shares, 0.0% held, Change: $17.6mm / 630,000 shares, Sector: Health Care
  • Schering Plough Corp (SGP) - $16.0mm, 638,300 shares, 0.0% held, Change: $11.4mm / 453,300 shares, Sector: Health Care
  • Gilead Sciences Inc (NASDAQ:GILD) - $15.2mm, 325,000 shares, 0.0% held, Change: $15.2mm / 325,000 shares, Sector: Health Care
  • Itron Inc (NASDAQ:ITRI) - $11.8mm, 215,000 shares, 0.6% held, Change: $11.8mm / 215,000 shares, Sector: Information Technology

Moore Capital Management was founded in 1989 by Louis Bacon. Notably, its Moore Global fund was ranked number 33 on this year’s Barron’s Hedge Fund 100 for its past 3 years of annualized returns of 18.98%. Moore Captial sent shockwaves through the hedge fund industry last year when it hired star emerging markets trader Greg Coffey away from GLG Partners.

For more information on the hedge funds and portfolio managers mentioned in this article, please see HedgeTracker’s Complete Hedge Fund Directory.

Disclosure: Long JPM, PM, KO, WYE, MRK