Balyasny Asset Management is founded by Loyola graduate Dmitry Balyasny in 2001 with a team of 12 people. Since then, the Chicago-based hedge fund, with its self-described “work hard/play hard” mentality and family environment, has grown to a team of over 100 people, spread across 4 offices in 3 countries. Of course, its emphasis on results-based compensation (what it calls a “meritocracy”) may have also played a role in the firm’s past success.
Lately, however, Balyasny Asset Management has not been delivering. Even after revamping its portfolio last quarter, Balyasny Asset Management’s top stock picks lost 12.5% since June, compared to 10.7% for the S&P 500 (SPY) during the same period.
Balyasny Asset Management’s Top Stock Picks:
Balyasny Asset Management’s largest losses were in its newest positions. Balyasny Asset Management lost 34% since last quarter on its position in Huntsman Corp (HUN), a new position and his ninth largest. Huntsman is a chemicals company that many hedge funds are getting bullish about. Doug Silverman of Senator Investment Group increased his position, which is the largest in the company of the hedge funds we track, by 15% last quarter (Check out Silverman’s top picks) and several other hedge funds followed suit. Robert Pohly of Samlyn Capital increased his position in the company by 296% last quarter (See Pohly’s top picks).
Balyasny Asset Management also lost big on its new position in Owens Corning (OC), losing 30% since the end of June. Dmitry Balyasny bought enough of Owens Corning to make the position his tenth largest. The move may have been a bit early but several other hedge funds, even those with larger stakes in the company, increased their positions in Owens Corning last quarter. Kevin Michael Ulrich of Anchorage Advisors (Read about Ulrich’s top positions) and Clovis Capital Management’s Scott Scher and Prober (Check out the Clovis team’s top picks) increased their positions in Owens Corning by 15% and 16% respectively.
While his most newer positions may not have paid off just yet, Balyasny is on a strong run with his CF Industries Holdings Inc (CF) position. His position in the company has gained 29% since the end of June, an impressive gain for an agricultural chemicals company. Phil Gross and Robert Atchinson of Adage Capital Management are also fans (See more about the $26.9 billion hedge fund).
We like Balyasny Asset Management. Dmitry Balyasny seems to be in the same downward plague that is affecting many marquee hedge fund managers right now (see the 10 Worst Performing Star Hedge Fund Managers), but that is not to say he won’t come out of it soon. Private investors are cautioned that while following Balyasny’s top picks may be a solid strategy, keep in mind that Balyasny Asset Management recently resurrected its focus on macro investing so much of its portfolio, including the non-equity portions, is sunk in currencies and other securities that will benefit from major shifts in economy or politics.
