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Analyzing The Baupost Group’s Holdings in 4Q14

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Nov. 20 2020, Updated 10:47 a.m. ET

Baupost Group holdings in 4Q14

Seth Klarman of The Baupost Group is one of the best performing hedge fund managers of all time. The fund generated $21.5 billion in returns over its history. In this series, we’ll discuss the notable holdings traded by the $27 billion fund—as highlighted in the fourth quarter filing in February.

In December, we noted that the size of the fund’s US long portfolio for 3Q14 fell to $5.74 billion. It was $6.14 billion in the second quarter. The recent 13F filing revealed that the fund’s 4Q14 portfolio declined more to $5.09 billion.

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A Bloomberg report, by Sabrina Willmer and Mary Childs, earlier this month said that the fund gained 7%–8% in 2014. However, it couldn’t outperform the S&P 500 Index. The index saw 14% returns. A year-end investor letter on the market environment in 2014 noted that “Bargains became increasingly scarce as the year progressed.” It also said that “Baupost wasted no time in redirecting additional investment team members into the energy area to sift through the carnage.”

Highlights of the fund’s recent 13G filings, covered earlier this quarter by Market Realist, said that Baupost added positions in PBF Energy (PBF) and Cheniere Energy (LNG). During 4Q14, the fund added a new position in Bellatrix Exploration (BXE). It raised positions in eBay (EBAY), Antero Resources (AR), and Kosmos Energy (KOS). It lowered positions in Micron Technology (MU), Ocwen Financial (OCN), and Syneron Medical (ELOS).

Notable positions traded during 4Q14

Notable additions made to Baupost’s biotech portfolio last quarter were Atara Biotherapeutics (ATRA), Forward Pharma (FWP), and Paratek Pharmaceuticals (PRTK). However, the fund disposed of a stake in Aveo Pharmaceuticals (AVEO). We noted that Klarman benefited from his biotech picks—like Idenix Pharmaceuticals. Merck & Co. acquired Idenix Pharmaceuticals in June last year.

Other notable biotech stocks in the fund’s portfolio include Kindred Biosciences (KIN), Theravance Biopharma (TBPH), and Keryx Biopharmaceuticals (KERX). Theravance Biopharma accounts for 0.01% of the Vanguard Health Care ETF (VHT).

In the next part of this series, we’ll discuss Baupost Group’s new position in Bellatrix Exploration.

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