Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners has filed its latest 13F, and there has been a good deal of turnover in the fund’s equity portfolio, which is consistent with its investment philosophy. The London, England-based fund, which was co-founded by the three men in 2009, focuses on maintaining liquidity and seeking opportunistic methods of capital allocation that take advantage of short-term market opportunities. 
The turnover in LMR Partners’ equity portfolio is immediately apparent from its top pick DaVita HealthCare Partners Inc (NYSE:DVA). This was only the eighth position in the fund’s portfolio heading into 2015, yet vaulted to the top of it a quarter later, despite the position actually being lowered during the first quarter, by 23% to 180,016 shares valued at $14.63 million. Nor did DaVita HealthCare Partners Inc (NYSE:DVA) rise because of a big quarter for the stock. It had solid first quarter returns of 7.31%, but that wasn’t nearly enough to explain its new top spot in LMR’s portfolio. Instead, it rose to the top entirely through the larger selloffs of the previously held top seven positions, which included former top pick HCA Holdings Inc (NYSE:HCA), which was sold-off completely during the first quarter. DaVita is not a stock to be taken lightly however, and stood as one of the only top picks of Warren Buffett to have strong returns last quarter.
Buffett held a massive $2.92 billion position in DaVita HealthCare Partners Inc (NYSE:DVA) as of the end of 2014. In second spot in LMR’s portfolio is Hospira, Inc. (NYSE:HSP), a position in which the fund previously held just over 22,000 shares, but increased that position to over 166,000 shares during the first quarter. The massive gains of Hospira, Inc. (NYSE:HSP)’s shares also contributed to its jump in value, with the position now being worth $14.63 million. Shares soared by more than 43% for the quarter following the announcement that Pfizer Inc. (NYSE:PFE) would acquire the pharmaceutical company for $90 per share. Without knowing when LMR’s shares were purchased during the quarter it’s unknown just how much they profited from the deal. We do know that James Pallotta’s Raptor Capital hit a homerun with the deal, as his fund had over 13% exposure to Hospira, Inc. (NYSE:HSP)’s stock, the highest in our database.
LMR’s position in Berkshire Hathaway Inc. (NYSE:BRK.A) is another of the ones it greatly reduced during the first quarter, slashing 41% of its holding to leave the fund with 90,443 Class B shares valued at $13.05 million. Berkshire Hathaway Inc. (NYSE:BRK.A)’s Class B shares dipped by 3.88% during the first quarter following a strong two year run during which they appreciated by nearly 70%. The Bill & Melinda Gates Foundation Trust, managed by Michael Larson is the largest shareholder of Class B shares of Warren Buffett’s holding company, with those shares having been donated to the Trust by Buffett. Berkshire Hathaway Inc. (NYSE:BRK.A) was instrumental in facilitating the recent merger between H.J. Heinz Company (NYSE:HNZ) and Kraft Foods, contributing $5 billion in capital towards the deal, which was carried out by 3G Capital.
LMR increased its position in Northrop Grumman Corporation (NYSE:NOC) by 293% during the first quarter, lifting its stake to 78,462 shares valued at $12.63 million.Northrop Grumman Corporation (NYSE:NOC)shares increased by 9.66% over the quarter, during which the defense contractor signed a $267 million deal with the U.S Navy to upgrade the electronic warfare package of its warships. That followed a $657.4 million announced in December with the U.S Air Force that will supply ally South Korea with four Global Hawk unmanned drones. The stock was considered one to watch back in September, and has gained over 25% since then. Jean-Marie Eveillard’s First Eagle Investment management was the largest shareholder of Northrop Grumman Corporation (NYSE:NOC) in our database at the end of 2014.
Lastly is Calpine Corporation (NYSE:CPN), which LMR opened a new position in during the first quarter. While it was the fund’s only new position in the top five, ten of its next 20 top picks after Calpine were newly initiated positions. The new position in Calpine Corporation (NYSE:CPN) amounted to 488,000 shares valued at $11.16 million. Analysts are not overly bullish on the energy company short-term, though LMR clearly sees a potential trigger in the stock’s near-term performance, based on its investment practices. Shares have dipped thus far in the second quarter. Calpine Corporation (NYSE:CPN) has a couple of other bullish investors in Brahman Capital and Addison Clark Management, each of which had exposure to the stock of over 10% heading into 2015.
Disclosure: None
