By Svea Herbst-Bayliss and Aaron Pressman
BOSTON (Reuters) - Top hedge fund managers went
bargain hunting in the oil patch in the second quarter, buying
shares whose prices had fallen because of BP's Gulf of Mexico
well disaster and lower oil prices.
Top managers including billionaire Carl Icahn, Eric Mindich
and Dinakar Singh, whose stock picks are closely watched in
investment circles, added energy stocks to their holdings as
billions of gallons of oil gushed into the Gulf, according to
quarterly securities reports filed on Monday.
Others buying energy shares included David Einhorn, former
Fidelity Investments star Jeff Vinik and the $22 billion
Boston-based fund Adage Capital.
Fund managers must say what U.S. listed equities they owned
within 45 days after the quarter ends.
While energy stocks ranked among the worst performers
during a quarter that also featured a still unexplained
flash-crash and fresh fears that the U.S. economy would recover
more slowly, hedge fund managers staked out the sector much
like they had with financial firms earlier in the year.
After building his energy holdings slowly at the beginning
of the year, Icahn picked up the pace in April, May and June by
committing nearly $1 billion to the sector after the Deepwater
Horizon drilling platform at BP's Macondo well exploded
and sank in the Gulf of Mexico.
The purchases included 2 million shares of oil and gas
producer Anadarko Petroleum and 240,000 shares of
offshore drilling specialist Ensco PLC's sponsored
American Depository Receipts, according to documents submitted
to the Securities and Exchange Commission Monday.
Icahn also added 2.4 million shares of NRG Energy,
a big power utility.
Dinakar Singh's hedge fund TPG-Axon bought 1.4 million
shares of Anadarko, while adding 2.1 million shares of drilling
services specialist Baker Hughes and 3.5 million shares
of Halliburton, another major oil services player.
Mindich, whose skills at Goldman Sachs helped him raise a
record $3 billion when he started his fund in 2004, bought 1.3
million shares of BP and call options to buy 1 million more.
Mindich's $13 billion Eton Park Capital also bought 168,000
shares of Baker Hughes, 165,000 shares of Diamond Offshore
Drilling, 300,000 shares of Forest Oil, 256,000
shares of Marathon Oil , 420,000 shares of Plains
Exploration & Production and 237,000 shares of Suncor
Vinik added 3.1 million shares of Exxon Mobil, 11,000
shares of Ensco and 2 million shares of the Oil Services HOLDRS
Trust, which owns a basket of 15 stocks in the sector.
Einhorn's Greenlight Capital bought 7.4 million shares of
Ensco, just over 5 percent of the company's shares. Ensco "was
not involved in the horrible accident, which should not
materially impact the company's long-term potential," Einhorn
wrote in a letter to his investors last month.
Adage, run by former managers from Harvard University's
endowment, owned 3.4 million shares of BP at the end of the
quarter, up from 124,000 three months earlier. The firm added
to existing positions in Anadarko, Ensco and Halliburton.
The bets mark a dramatic change in their portfolios, coming
as many other investors pulled their money out. BP's stock
price fell over weeks until its value had fallen by half.
Even prominent mutual fund manager Fidelity Investments,
where millions of Americans hold their college savings and
retirement accounts, appears to have joined the trend.
Fidelity managers added 24.2 million shares of Exxon,
leaving it with 74.9 million shares, making it the fifth
biggest holding for Fidelity. It also added 10.9 million shares
The forms managers filed Monday include only U.S.-listed
equity securities and related derivatives. Bonds, other
securities and short positions are typically not disclosed.
Managers may also omit U.S.-listed equities under certain
circumstances or file some holdings on confidential filings.
(Reporting by Svea Herbst-Bayliss and Aaron Pressman.
Additional reporting by Emily Chasan in New York and Ross
Kerber in Boston. Editing by Robert MacMillan)