Morning Brief: Bridgewater Boosts Bet on Emerging Markets

November 14, 2017   Stephen Taub

The world’s largest hedge fund firm increased stakes in its two largest positions, both of which are emerging markets funds, according to a regulatory filing.

Bridgewater Associates, which typically devotes most of its U.S. equity assets to exchange-traded funds, boosted its bet on emerging markets in the third quarter, according to a regulatory filing. The world’s largest hedge fund firm increased stakes in its two largest positions, both of which are emerging markets funds. Its stake in a Vanguard emerging markets stock index fund was increased by 11 percent, and its position in the iShares MSCI emerging markets ETF by 15 percent.

Bridgewater more than tripled its stake in an iShares core MSCI emerging markets fund, now its fourth largest position accounting for nearly 9 percent of its U.S. equity assets, according to the filing. The firm also disclosed that it increased its bet on a gold ETF by nearly six-fold.

Bridgewater’s entire U.S. stock portfolio was valued at nearly $11 billion at the end of September, which works out to less than 7 percent of the firm’s total $160 billion of assets under management. The firm’s three largest positions, including the SPDR S&P 500 trust, account for about 62 percent of its equity portfolio.

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Shares of Buffalo Wild Wings surged 28 percent to around $150 in after-hours trading after the casual dining restaurant chain received an acquisition offer from Roark Capital Group, according to a report from The Wall Street Journal, which cited people familiar with the matter. Roark offered more than $150 a share, the newspaper said. If the deal goes through at the price, Buffalo Wild Wings would be valued at $8 more per share than what stockowner Mick McGuire III’s Marcato Capital Management disclosed paying in a regulatory filing.

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Marcato Capital Management released November 13 an investor presentation to Deckers Outdoor Corp. shareholders making the case for changing the entire board of directors. "Deckers’ inability to deliver on its short- and long-term financial goals is unacceptable," Mick McGuire, Marcato’s managing partner, said in the hedge fund’s announcement about its presentation. "We believe immediate change is needed at the board level as a result of the incumbent directors’ lack of urgency and failure to provide proper oversight of management."

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Baupost Group trimmed the value of its U.S. equity portfolio to $8 billion at the end of the third quarter, from $8.75 billion the previous quarter, according to its latest 13F filing. The hedge fund headed by Seth Klarman did not establish any new significant positions. However, it liquidated its stake in Qualcomm.


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