According to the Wall Street Journal, hedge fund manager John Armitage of Egerton Capital made $1.5 billion for his investors last year. Armitage was said to be short oil and energy stocks, pressing those position as much of his peers were looking for a bounce.
In a world where some of the world’s best investors will end the year down double digits, Armitage’s net worth has likely grown toward the billion dollar level after collecting fees on his top-tier industry performance.
So who is John Armitage?
Armitage graduated from Cambridge University in 1981 with a degree in modern history. He started his hedge fund Egerton Capital in 1994 and has put up some of the best risk-adjusted returns in the hedge fund industry since. Egerton has returned 15% net of fees with significantly less volatility than the S&P 500 since 1994. That’s why the fund has amassed more than $15 billion in assets under management.
For a glimpse into the best ideas from John Armitage, below are the top 5 holdings of his $15 billion hedge fund, Egerton Capital:
Time Warner Cable (TWC)
Southwest Airlines (LUV)
Gilead Sciences (GILD)
Comcast (CMCSA)
Priceline (PCLN)
At Billionairesportfolio.com we run an actively managed online portfolio of the “best ideas” from the world’s best billionaire investors and hedge funds. With that, we pay close attention anytime one of these great investors is making the case for one of their positions, particularly when feel confident enough to call it one of their best ideas. That’s precisely what we got a glimpse of these past two days at an annual fund raising event, the Robin Hood Investment Conference, hosted by billionaire hedge funder Paul Tudor Jones.
Here is a quick recap of their best ideas:
1) David Tepper- Billionaire David Tepper called the Chinese currency extremely overvalued. This view is in line with one he expressed in the past few weeks, arguing for the potential for China’s central bank to ease monetary policy more aggressively than most have thought. An aggressively easing PBOC and weakening of the yuan would be needed fuel for the sluggish Chinese economy, which would bode well for the outlook for Chinese stocks.
2) T. Boone Pickens – Self-made billionaire Boone Pickens told the Robin Hood audience to expect $70 oil by June of next year, which would be almost a double from oil’s price today. Pickens also said he liked the oil stock Pioneer Natural Resources (PXD). To trade Boone Pickens oil call you can buy the oil ETF (USO) or the oil and gas producers ETF (XOP).
3) Bill Ackman- Ackman reiterated his belief that Valeant (VRX) was extremely undervalued and that it should merge with Allergan (AGN) ,because Ackman does not believe the Allergan-Pfizer merger would be approved. Ackman also reiterated his view that Herbalife (HLF) was still a compelling short, with news from the DOJ to possibly come out today on nutritional supplements.
4) Larry Robbins – Billionaire Larry Robbins founder of the hedge fund Glenview Capital, pitched FMC, HCA and MON. Monsanto is Robbin’s second biggest position in his fund at almost $1.2 billion.
5) Dan Loeb – Billionaire Dan Loeb of Third Point said he thought Amgen (AMGN) and Allergan (AGN) should merge. Amgen is Loeb’s second biggest position in his hedge fund, at almost 13% or $1.4 billion.
6) John Paulson – Billionaire John Paulson’s top associate Samantha Greenberg pitched Charter Communications (CHTR). Greenberg said that Charter could be worth as much as $294 over the next year or almost a 60% return
from its share price today.
7) David Einhorn – Billionaire David Einhorn pitched Consol Energy (CNX). Einhorn first took a position in Consol at around $37 last year, today it sells for $7.80. That means if Consol just went back to the price Billionaire David Einhorn paid that would be more than a 350% return.
Good friend to our website, and legendary hedge fund allocator, Mark Yusko was on CNBC yesterday and made the bold statement that the Fed should move rates back to normal in one swoop. As we’ve talked about many times, and contrary to the broad sentiment, the first rate hike by the Fed is a celebratory event. After nine plus years of crisis and near global economy apocalypse, the Fed thinks the economy is robust enough to begin removing emergency policies. Article from CNBC.com below with Mr. Yusko’s sentiments…
Morgan Creek Capital Management CEO Mark Yusko said Wednesday the Federal Reserve should raise interest rates to 3 percent in one fell swoop.
“Get back to normal,” Yusko told CNBC’s “Squawk Box.”
“Just reload the gun, 300 basis points.”
Acknowledging a move like that would shock the markets, he argued, “it would send a message of confidence and saying the economy is strong [and] it can handle normal interest rates.”
The Fed’s two-day September meeting begins Wednesday, with a decision on whether to raise rates for the first time in more than nine years Thursday afternoon, followed by a news conference by central bank chief Janet Yellen.
Read More Fed’s market dependence is troubling: David Darst
“If you think about … 100-plus years of history, the short-term rate has been equal to the nominal GDP growth rate. Nominal GDP is around 4 percent. So 3 [percent] would even be below that,” said Yusko whose Morgan Creek Capital, currently with $4.5 billion in assets under management, is primarily a hedge fund allocator, which means it invests in other funds on behalf of clients. The firm also makes its own bets on certain stocks.
“This artificial period of rates has been harmful,” he said. “It’s like water behind pipe. If you hold it back, hold it back, hold it back. When it finally releases, it’s going to be much worse.”
Morgan Creek was founded in July 2004 by Yusko, a former chief investment officer of The University of North Carolina at Chapel Hill Endowment. He has close ties with investment legend Julian Robertson, who provided seed funding.
Billionairesportfolio.com, run by two veterans of the hedge fund industry, helps self-directed investors invest alongside the world’s best billionaire investors. By selecting the best ideas from the best billionaire investors and hedge funds, our exited stock investment recommendations have averaged a 27% gain since 2012.
At Billionairesportfolio.com we actively manage a portfolio of the “best ideas” from the world’s best hedge funds, and our members get to follow along.
Following the highest conviction trades of the world’s best hedge funds works especially well in the biotech sector. It gives you direct access to the smartest investment minds with a niche concentration in science and medicine. They work for you, for free. This is critical, because there is no more complicated sector than biotech. You virtually need an MD or PhD from Harvard or Johns Hopkins to understand these companies.
With that said, the following four stocks are all owned by some of the best biotech hedge funds in the world. Moreover, they all have an average analyst price target that is at least 200% higher than its current share price.
1) AcelRX Pharmaceuticals (ACRX) has a current share price of $7. The consensus analyst price target is $15. That gives us a “street projected return” of 114%. Perceptive Advisors owns more than 15% of ACRX. Perspective is one of the top performing biotech hedge funds in the world, managing more than a billion dollars and returning an incredible 42% annualized since 1999. If you would have invested $10,000 in Perceptive in 1999, you would now have $1.3 million.
2) Ocera Therapeutics (OCRX) has a current share of $6.97. The consensus analyst price target is $17. That gives us a “street projected return of 143%. Ocera is owned by RA Capital Management, another top biotech focused hedge fund. RA Capital has returned 40% annualized since 2002, without one losing year, and is run by Peter Kolchinsky, a Harvard PhD in Virology.
3) Ariad Pharmaceuticals (ARIA) has a current share price of $6.50. The consensus analyst price target is $14. That gives us a “street projected return of 115%. Ariad is owned by one of the best emerging biotech hedge funds, Sarissa Capital Management. Sarissa is run by Alex Denner, a Yale PhD and the former head of healthcare investments for Carl Icahn. Sarissa owns almost 7% of Ariad.
4) Infinity Pharmaceuticals (INFI) has a current share price of $15. The consensus analyst price target is $39. That gives us a “street projected return of 160%. INFY is owned by one of the best and longest running biotech focused hedge funds, Orbimed Advisors. Orbimed runs over $10 billion dollars. The fund is run by the Princeton educated Samuel Isaly, and has returned 27% annualized since 1993. Orbimed owns almost 10% of Infinity Pharmaceuticals.
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