Farallon Capital, a hedge fund founded by Thomas Steyer in 1986, owns a pretty diversified portfolio, as its latest 13F filing showed. Moreover, recently the equity portfolio was augmented with a new position, as one of the fund’s investments, Nexvet Biopharma plc (NASDAQ:NVET), went public at the beginning of February. Farallon reported a 27% activist stake in the company, which amounts to 3.17 million shares. In addition, Farallon has a representative on the company’s board, Rajiv Patel, who is a Managing Member and portfolio manager at the fund.
Nexvet Biopharma plc (NASDAQ:NVET) is a biotech & medical research company that went public a couple of weeks ago, and since the IPO, the stock gained around 8%. Another shareholder of the company is Phill Gross and Robert Atchinson’s Adage Capital Partners, which reported ownership of 825,000 shares shortly after the IPO. The current value of Nexvet Biopharma plc (NASDAQ:NVET) places Farallon’s holding at some $30 million, which represents a small fraction of the fund’s $7 billion equity portfolio as of the end of December.
In fact, during the fourth quarter, the fund has made several bold moves and boosted its exposure to all of its four largest holdings in terms of value. The first holding is represented by Allergan, Inc. (NYSE:AGN), in which the fund disclosed almost 2.50 million shares, valued at $531.05 million shares, up by nearly 130% over the previous quarter. Farallon initiated the stake in Allergan during the second quarter, following the trend of many other investors who became bullish on the company on the back of the attempts made to purchase it by Bill Ackman‘s Pershing Square and Valeant Pharmaceuticals Intl Inc (NYSE:VRX). Even though Mr. Ackman and Valeant failed, the investors have been rewarded with larger returns after Allergan, Inc. (NYSE:AGN) entered into a deal with Actavis to be purchased by the latter for $66 billion, which is above the $60 billion bid made by the Pershing Square-Valeant group. As the proxy fight between Allergan, Inc. (NYSE:AGN) and Pershing Square was unraveling, investors became more and more convinced that a deal was on its way, which sent the stock surging over the last year by 80%.
Even though Bill Ackman did not succeed in acquiring Allergan, Inc. (NYSE:AGN) together with Valeant, he still made a lot of money from the Actavis-Allergan deal. In its latest 13F filing, Pershing Square reported holding 26.64 million shares of Allergan, valued at $5.66 billion. Among other investors betting on the stock were John Paulson, Daniel Och, Andreas Halvorsen and Paul Singer.
Next on the list was another merger stock, Covidien plc (NYSE:COV), which was acquired by Medtronic and stopped trading at the end of January.
It is followed by DIRECTV (NASDAQ:DTV), in which Farallon raised its stake by 30% to 4.74 million shares worth $410.53 million. At the end of the previous quarter, DIRECTV (NASDAQ:DTV) was the fund’s largest holding, after the stake was raised by almost a threefold amount during the July-September period. The stock of the broadcasting company appreciated by 15% over the last 52 weeks as the company has been reporting consistent earnings per share (EPS) and revenue growth that has come in above the estimates. On the back of a solid performance, the number of funds holding shares of DIRECTV (NASDAQ:DTV) went up to 63 from 57, while the aggregate value of the stakes held by the funds that we track surged to $10.66 billion, half of which is held by billionaire investors such as Warren Buffett, who upped his stake by 4% to 31.35 million shares.
Farallon also held around 9.05 million shares of Safeway Inc. (NYSE:SWY) at the end of 2014, and exited the position as the company was acquired by Albertsons and taken private.
Moreover, Farallon reported holding 8.72 million shares of Hudson Pacific Properties Inc (NYSE:HPP) valued at $262.18 million, and has since upped that slightly to 8.74 million, according to a January 13D filing. Furthermore, a couple of weeks ago, Farallon and Hudson Pacific Properties Inc (NYSE:HPP) entered into a lock-up agreement, under the terms of which Farallon will not sell any shares of the company for 60 days. Overall, 20 funds from our database disclosed long positions in Hudson Pacific Properties Inc (NYSE:HPP) in the latest round of 13F filings, up from 13 funds in the previous quarter. Another shareholder of Hudson Pacific Properties is Neil Chriss’ Hutchin Hill Capital, which initiated a stake with 600,000 shares during the fourth quarter.
Cubist Pharmaceuticals Inc (NASDAQ:CBST) was the sixth holding in terms of value in Farallon Capital’s latest 13F filing. Cubist represented a new position with Farallon owning 2.57 million shares, worth $258.17 million. Cubist Pharmaceuticals was recently delisted as it was purchased by Merck.
Disclosure: None
