The Morning Brief:13F Highlights from Druckenmiller, ValueAct and More

It’s that time of year again: today is the deadline for investment firms to disclose their equity holdings for first quarter of 2014 in the SEC’s form 13F. Hedge fund managers generally prefer to file as late as possible, so the forms are now piling up on the commission’s website. Stanley Druckenmiller, who retired as a hedge fund manager in 2010, cut his U.S. equity portfolio by 40 percent, to $886 million from $1.5 billion at year-end, according to the 13F filing of Druckenmiller’s Duquesne Family Office. It unloaded 32 stocks and added just 11 in the most recent quarter. Its top 10 holdings alone account for nearly 87 percent of the portfolio. His largest two new positions are current targets of activists — Walgreen Company, which is now his second largest position overall, and Microsoft. His largest holding at the end of March was by far Google, accounting for nearly one-third of assets. Druckenmiller also dumped his entire stake of Schlumberger, Delta Air Lines and in the first quarter.

Jeffrey Ubben’s ValueAct Capital established two new positions in the third quarter. It bought nearly 7.6 million shares of Symantec, an antivirus software maker, and nearly 2.2 million shares of Expeditors International of Washington, a freight forwarding company with headquarters in Seattle.

Seth Klarman’s Baupost Group boosted its stock portfolio by 17 percent, to more than $4.1 billion at the end of March. Even so, equities account for just 15 percent or so of the $26.8 billion that the Boston firm managed overall at the beginning of this year. Its largest new position is roughly 6.6 million shares of Cheniere Energy, making it Baupost’s fourth largest U.S. equity position.


Richard Perry’s Perry Capital boosted its stake in Herbalife by 60 percent, to 4.8 million shares, making it the New York hedge fund manager’s fourth largest holding at the end of the first quarter.

Kenneth Griffin’s Citadel Advisors disclosed a 5 percent passive position in Hillshire Brands Company, the food company best known for brands such as Jimmy Dean, Ball Park and Sara Lee.

Daniel Gold’s QVT Financial disclosed it owns 5.35 percent of Ocera Therapeutics, a clinical stage biopharmaceutical company focused on the development of treatments for patients with acute and chronic liver disease. The filing indicates it is a passive investment.

Starboard Value’s Jeffrey Smith fired off a letter to the board of directors of Darden Restaurants, criticizing statements that Matthew Stroud, Darden’s vice president of investor relations, made last week to a group of shareholders attending a lunch in New York City. Stroud told the shareholders that the company is on track to complete a sale or spin-off of Red Lobster in June or July. Smith reminded the board that on April 22, Starboard delivered written requests to Darden to call a special meeting of shareholders from holders of more than 55 percent of its outstanding shares. He also notes that on May 6, the independent inspector of elections, IVS Associates, issued its final, certified voting report confirming that Starboard delivered valid written requests to call the special meeting from holders of 57 percent of the shares. “Mr. Stroud also informed the group of shareholders that the company believes it can delay calling the special meeting as far as 60 days from the date of certification of the written requests, and that the company is not required to hold the special meeting thereafter for an additional 60 days,” Starboard states in the filing. “Mr. Stroud’s statement is inconsistent with Florida law, which clearly provides that the initial 60 days to call the special meeting starts when the written requests are delivered, not certified. Starboard is disturbed that Darden seems more intent on discussing how it can delay the special meeting rather than taking the steps required to hold the special meeting.”