Hedge Funds’ Unhealthy Diets: Gobbling Up Burgers And Donuts

S&P Capital IQ ™, a leading provider of multi-asset class research data and insights, today released its review of 2014 Q4 13F filings by pure play hedge funds.  The quarterly S&P Capital IQ Hedge Fund Tracker is an aggregate analysis of hedge fund stock ownership that spotlights hedge fund trend-investments in specific stocks and sectors.  Our analysis suggest that the financial and industrials sectors saw the largest amount of buying activity in Q4, with Industrials always being a net buy throughout calendar year 2014. Restaurant Brands International (the parent of Burger King/Tim Hortons), Crown Castle International and Shire appear to be the largest buy positions.

Following is a summary of findings in the Q4 2014 Hedge Fund Tracker as well as the previous 3 quarters of 13F filings in 2014:

  • Top Funds: Citadel and Millennium were the top two hedge funds in terms of total equity holdings, followed by Renaissance Technologies.
  • AbbVie and Actavis Fall From Grace: Last quarter’s top two buys – AbbVie and Actavis – were the top two sells in Q4, with a total of $3.1 billion and $1.3 billion sold off, respectively.  Overall, the Healthcare sector saw a $2.3 billion sell-off in Q4.  Despite the sharp sell-off, some funds remained buyers of Actavis, with $746 million of buys logged this quarter
  • Hedge Funds Gobble Up Burger King/Tim Hortons Tie Up: Restaurant Brands International, the newly formed parent company of Burger King Worldwide and Tim Hortons was the top buy of the quarter with $1.5 billion in buying volume among top funds.  The large majority of that was bought by Pershing Square Capital.

  • Financials Net Buy Sector For Hedge Funds: The Financial sector saw the most buying activity among hedge funds in Q4 2014 compared to Q3 2014; a total of $4.2 billion in aggregate buys were made.
  • Industrials Consistently In Favor With Hedge Funds Throughout 2014: The Industrials sector has remained a net buy for the Hedge Fund Tracker’s top ten hedge funds throughout 2014. In Q4, specifically, Industrials were the 2nd top net buy with a value of $3.1 billion.
  • Running for the Exits on 20th Century Fox: In Q4, three hedge funds pulled out of Twentieth Century Fox completely with a total of $888 million sold-off during the quarter; this is the second quarter in a row where significant sell-offs of the stock have been initiated by hedge funds.
  • Minimalist Investors: Six of the top 10 pure play hedge funds in the Q4 Hedge Fund Tracker had fewer than 100 equity holdings in their portfolios through Q4. Pershing Square Capital had the fewest, placing all of its equity holdings into just 9 different stocks.  

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