Sunday, September 6, 2009

Eric Mindich's Eton Park Capital

Eric Mindich started hedge fund Eton Park Capital back in 2004 with $3 billion under management with a $5 million minimum investment. Nowadays, Eton Park manages over $6 billion. Their investment strategy draws upon Mindich's time at Goldman Sachs where he focused on merger arbitrage. He was so good at his job that he became the youngest partner in Goldman Sachs' history at the age of 27. In addition to merger arbitrage, Eton Park focuses on long/short equity strategies and even invests up to 30% of their portfolio into private investments. The following were Eton Park's long equity. Note, and options holdings as of June 30th, 2009 as filed with the SEC. All holdings are common stock unless otherwise denoted.

Some New Positions (Brand new positions that they initiated in the last quarter):
US Steel (X) Puts, Pfizer (PFE) Calls, Caterpillar (CAT) Puts, Deere (DE) Puts, CF Industries (CF), General Electric (GE) Puts, Liberty Media (LMDIA), ML Retail Holdrs (RTH) Puts, Comcast (CMCSK) Calls, SPDR Retail (XRT) Puts, Materials SPDR (XLB) Puts, Pepsi Bottling Group (PBG), Deere (DE) Calls, Data Domain (DDUP), iShares Brazil (EWZ) Calls, Verisign (VRSN) Puts, Netapp (NTAP) Calls, Vale (VALE) Calls, Emulex (ELX), and PepsiAmericas (PAS).

Some Increased Positions (A few positions they already owned but added shares to)
iShares Brazil (EWZ): Increased by 327.5%
Wyeth (WYE): Increased by 172.6%
Caterpillar (CAT) Calls: Increased by 148.9%
Schering Plough (SGP): Increased by 129.5%
Comcast (CMCSK): Increased by 77.6%
Amdocs (DOX): Increased by 57.8%
Alcoa (AA) Calls: Increased by 33.3%
Potash (POT) Puts: Increased by 29.5%
Lorillard (LO): Increased by 25.67%

Some Reduced Positions (Some positions they sold some shares of)
Petroleo Brasileiro (PBR) Puts: Reduced by 75%
SPDR Gold Trust (GLD): Reduced by 68.9%
iShares Brazil (EWZ) Puts: Reduced by 50%
Ebay (EBAY): Reduced by 46.4%
VimpelComm (VIP): Reduced by 42.5%
SPDR Gold Trust (GLD) Calls: Reduced by 36.4%
Goodyear Tire (GT): Reduced by 34.8%
iShares Emerging Markets (EEM) Puts: Reduced by 32%
Hansen Natural (HANS): Reduced by 21.9%
Wells Fargo (WFC) Puts: Reduced by 17.9%

Removed Positions (Positions they sold out of completely)
SPDR Gold Trust (GLD Puts, Google (GOOG), Google (GOOG) Calls, Suncor (SU), Grupo Televisa (TV), Walter Industries (WLT), News Corp (NWS-A), Select Sector Financial (XLF) Calls, Lamar Advertising (LAMR), General Motors (GRM), Allergan (AGN) Calls, EMC (EMC), Cisco Systems (CSCO) Calls, News Corp (NWS), Nokia (NOK), and CV Therapeutics (CVTX).

Top 15 Holdings by percentage of long portfolio *(see note below regarding calculations)
  1. SPDR Gold (GLD) Calls: 8.94% of portfolio
  2. Potash (POT) Puts: 8.43% of portfolio
  3. US Steel (X) Puts: 5% of portfolio
  4. iShares Emerging Markets (EEM) Puts: 3.84% of portfolio
  5. iShares Brazil (EWZ) Puts: 3.7% of portfolio
  6. Caterpillar (CAT) Calls: 3.46% of portfolio
  7. Viacom (VIA-B) Calls: 3.2% of portfolio
  8. Pfizer (PFE) Calls: 3.15% of portfolio
  9. Verisign (VRSN): 3.11% of portfolio
  10. Schering Plough (SGP): 2.74% of portfolio
  11. Hospira (HSP): 2.56% of portfolio
  12. Caterpillar (CAT) Puts: 2.54% of portfolio
  13. John Deere (DE) Puts: 2.52% of portfolio
  14. Potash (POT) Calls: 2.48% of portfolio
  15. Viacom (VIA-B): 2.46% of portfolio
Eton Park's portfolio is absolutely loaded with options positions. The vast majority of their top holdings are bearish plays as they own puts on a variety of exchange traded funds (ETFs) and global growth type names. Additionally, their call position on Gold via GLD remains their top holding which is also a cautionary measure (although they did reduce this position by 36.4%). At the same time, they also sold off a ton of their common shares of GLD and they sold completely out of their GLD puts position.

No comments:

Post a Comment