Viking Global Investors is apparently making a bottom-fishing bet on energy stocks. The Greenwich, Connecticut hedge fund firm co-founded by O. Andreas Halvorsen disclosed sizable, passive stakes in at least two companies in the oil and gas sector. It did not disclose a position in either stock as of the end of the third quarter and did not discuss or identify these companies in its fourth quarter client letter.
The hedge fund firm said in a 13G filing that it owned nearly 31 million shares of Cabot Oil & Gas as of January 11, or 7.5 percent of the natural gas producer. In a separate filing, Viking said that as of January 11 it owned roughly 35.5 million shares of Southwestern Energy, or 9.2 percent of the oil and gas company. At the end of the fourth quarter, Viking had just a 3.2 percent net exposure to the energy industry.
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Daniel Loeb’s Third Point Ventures — the venture fund from his New York-based hedge fund firm Third Point — participated in the new, $25 million Series C financing for Kumu Networks, which is building technology to improve wireless service. This is the fund’s second investment in the Sunnyvale, California company, which so far has no revenues but is reportedly planning to introduce its first product later in the year. Third Point led the firm’s $15 million Series B financing in October 2013.
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New York-based investment firm Davidson Kempner Capital Management disclosed it owns 5.12 percent of Rayonier Advanced Materials, a chemical company specializing in cellulose specialties products.
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While 2015 was tough for many event-driven managers, with Hedge Fund Research’s HFRI event driven index falling 3.30 percent, one small event-focused hedge fund managed to buck the trend. John Melsom’s Omni Event Fund, an Irvine, California-based fund from London-based Omni Partners, returned 16.4 percent last year by focusing on hard catalysts, investing in global situations and putting together trades in novel ways, such as structuring trades through options as opposed to buying stock outright in some cases. The fund, which manages a little over $100 million, is fairly concentrated, with 80 percent of its assets held in its top-ten positions. Its biggest winning trade last year was the acquisition of Pharmacyclyx by drug giant AbbVie.
The fund, launched in September 2013, fell 3.5 percent in 2014 and gained more than 6 percent in its first four months of trading to finish 2013. Melsom previously co-managed the Omni Global fund with Gavin Simpson, who retired in early 2013. He is one of Omni’s original partners, having joined the firm at its inception in 2004, and had worked with Omni founder Steve Clark since 2001.
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UBS cut its price target on Tenet Healthcare from $62 to $51 after meeting with several members of Tenet’s management earlier in the week. In an otherwise upbeat note to clients, the bank also retained its buy rating on the shares of the manager of acute care hospitals and other healthcare facilities. Earlier this week, two partners for Larry Robbins’ Glenview Capital Management were appointed to the board of directors of Tenet. UBS pointed out that in its meeting with Tenet, management felt that given Glenview’s nearly 18 percent stake, “it was important to have the relationship be on a collaborative basis.” UBS also noted that Tenet said board participation shows that Glenview is committed to its position in the company.
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How much money is invested in the hedge fund industry? It all depends upon who is doing the counting. According to data tracker eVestment, there was $3.027 trillion at year-end, after total assets declined by $58.2 billion in December. Of that falloff, $24.6 billion was due to net redemptions, while $33.7 percent was attributed to performance losses. Yesterday we reported that HFR counted $2.9 trillion industry-wide at the end of 2015.
