The Morning Brief: Baupost Slashes Stake in Cheniere

January 10, 2017   Stephen Taub

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Seth Klarman’s Baupost Group sold more than 6.1 million shares of hedge fund favorite Cheniere Energy, or nearly one-quarter of its position. As a result, as of December 31 it owned 21.7 million shares, or 9.25 percent of the total. At the end of the third quarter, the exporter of liquefied natural gas was by far the Boston hedge fund firm’s largest U.S. equity long position. Baupost also was the second-largest shareholder, behind Carl Icahn. Other top-ten holders included Lone Pine Capital and Valinor Management, headed by David Gallo. He can be called both a Tiger Cub and a great-grand-Cub. He once worked at New York–based Bridger Management, founded by Roberto Mignone, who in turn had worked for Tiger Cub John Griffin’s Blue Ridge Capital Holdings. Gallo also worked at Tiger Management.

The stock, which gained more than 11 percent last year, fell 2.36 percent on Monday, to close at $43.84.

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JANA Partners trimmed its stake in its largest long position, ConAgra Brands, to 21.59 million shares or so, or 4.96 percent of the total. This is down from 22.86 million shares as of the end of the third quarter, the last three-month period for which investors are required to file their U.S. stock holdings. Now that its position is below 5 percent, JANA no longer has to file timely disclosures when it sells additional shares. The conglomerate’s stock had been the sometime-activist hedge fund firm’s largest disclosed U.S. long holding for the past four quarters through September.

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D.E. Shaw disclosed it owns nearly 3.7 percent of BioCryst Pharmaceuticals, or 5 percent of the total, as of December 29. The drug company focuses on orphan and autoimmune diseases.

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The HFRI Fund Weighted Composite Index rose 1.1 percent in December, bringing the gain for the year to 5.6 percent, its best year since 2013. The HFRI Asset Weighted Composite Index also posted a 1.1 percent gain last month. It finished the year up 2.96 percent. HFR’s index of energy/basic materials sector funds surged 18.71 percent for the year, making it the best-performing sub-sector. Interestingly, the Event-Driven Index returned 10.22 percent for the year, but on an asset weighted basis it gained just 5.21 percent.


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