One of the largest global asset management firms focused on credit, GoldenTree Asset Management, was founded back in 2000 by Steven Tananbaum, and it currently manages around $28 billion in assets. The fund has offices in New York, London, Sydney, and Singapore. Aside from being the founder of the fund, a CFA charterholder, Steven Tananbaum, is also its Chief Investment Officer and Managing Partner, in charge of supervising all fund’s investments, while also being a portfolio manager in charge of GlodenTree Loan Management. Before launching his own fund, Steven Tananbaum sharpened his investment knowledge at MacKay Shields, where he was at the top of the company’s high yield group. He managed to attract good returns, and MacKay Shields’ high yield funds were regarded among the best. Prior to MacKay Shields, Steven Tananbaum was working at Kidder, Peabody & Co. He earned his B.A. in Economics from Vassar College.
GoldenTree Asset Management’s specialties are investments belonging to the credit market, covering all from distressed debt, through high yield bonds and emerging markets, to private equity. The fund is managing investments for all kinds of institutional investors, such as insurance companies, corporate pensions, sovereign wealth funds, endowments, and foundations. It offers two types of strategies – Alternative and Long Only. Under Alternative, the fund proposes several options, such as Master, Credit Opportunities, Distressed, and Opportunistic Structured Product, while under Long Only it provides choices of Multi-Sector, Value, Loan, Structured Product, and Emerging Markets. The fund looks carefully for the companies with the potential to invest in, and searches for catalysts that could bring satisfying profits, always trying to provide an investment with the least risk possible. The fund’s investment strategy turned out to be very bright, bringing positive returns throughout the years.
In 2011 its GoldenTree Credit Opportunities fund gained 0.7%, which was followed by a much higher return in 2012 through October when it delivered 15.3%. Its GoldenTree Master fund lost 0.3% in 2011, but came back the next year, delivering 10.5% through October 2012. In 2013 it had a much better return of 13.04%, in 2014 it was up by 8.15%, and in 2015 it delivered 0.70%. It continued to have a positive performance in the following years, bringing back 7.56% in 2016, 7.07% in 2017, and in 2018 through October it had a return of 5.42%, Its total return amounted to 427.50%, for a compound annual return of 9.54%, and its worst drawdown was 40.65.
Insider Monkey’s flagship strategy identifies the best performing 100 hedge funds at the end of each quarter and invests in their consensus stock picks. This way it is always invested in the best ideas of the best performing hedge funds and is able to generate much higher returns than the market. Since its inception in May 2014, our flagship strategy generated a cumulative return of 89%, beating the S&P 500 ETF (SPY) by 29 percentage points (see the details here).
On December 31, 2018, the fund’s equity portfolio was valued around $634.03 million, and being concentrated it counted 23 positions, out of which nine were new. The fund’s investment philosophy proved to be somewhat unique as its portfolio didn’t have a single stock of those most popular stocks among hedge funds. The largest stake, after the fund had raised it by 55%, was in Bausch Health Companies Inc (NYSE:BHC), and it counted 4.17 million shares, which were valued $77.06 million. This position accounted for 12.15% of the fund’s equity portfolio. Bausch Health, previously known as Valeant Pharmaceuticals, is a specialty pharmaceutical company headquartered in Canada, with a market cap of $8.20 billion. Over the last 12 months, the company’s stock gained 23.74%, and on February 25th it had a closing price of $23.35. In its financial report for the fourth quarter of 2018, Bausch Health disclosed a net loss of $344 million, compared to net income of $513 million for the same period in 2017, and GAAP loss per share diluted for Q4 2018 of $0.98, versus GAAP earnings per share of $1.45 for the corresponding quarter of 2017. There were 30 investors from Insider Monkey’s table long Bausch Health at the end of the third quarter of 2018, up by 7 from one quarter earlier.
Continue reading on the next page in order to find out about other GoldenTree Asset Management’s investment moves and portfolio changes.
At the end of the fourth quarter of 2018, GoldenTree Asset Management held another large stake in Eagle Bulk Shipping Inc. (NASDAQ:EGLE). This was $57.8 million worth a position, on the account of 12.54 million shares. Eagle Bulk Shipping, is a transportation company and shipowner-operator that mainly transports dry bulk commodities. It has a market cap of $365.87 million, and over the last 12 months, its stock gained 2.43%, having its closing price on February 25th of $5.04. At the end of Q3 2018, there were 17 investors from Insider Monkey’s database long this stock, up from 13 in the previous quarter. On February 15th, Morgan Stanley set a price target on the stock of $5.00 and placed a “hold” rating, while Maxim Group reiterated “buy’ rating on the stock, with a price target of $7.00.
GoldenTree Asset Management initiated the biggest new position during the fourth quarter in Caesars Entertainment Corporation Common Stock (NASDAQ:CZR), by purchasing 7.58 million shares, with a value of $51.5 million. This position accounted for 8.12% of the fund’s equity portfolio. Caesars Entertainment is one of the world’s largest gaming companies based in Paradise, Nevada. It has a market cap of $6 billion, and it is trading at a price-to-earnings ratio of 23.94. Over the last 12 months, its stock dropped by 32.12%, and it had a closing price on February 25th of $8.96. On February 25th, Deutsche Bank reiterated its “buy” rating on the stock, with a price target of $11.00, while on January 16th, Bank of America downgraded its rating to “neutral” from “buy. For the fourth quarter of 2018, Caesars reported net revenue of $2.12 billion, compared to net revenue of $1.90 billion for the corresponding quarter of 2017, and diluted earnings per share of $0.25 compared to diluted EPS of $2.48 in the fourth quarter of 2017. There were 62 smart money investors from our table with long positions in Caesars Corp at the end of Q3 2018, up from 58 in Q2 2018. The second biggest new stake GoldenTree Asset Management established in International Game Technology PLC (NYSE:IGT), by acquiring 1.93 million shares, valued $28.3 million.
During the fourth quarter of 2018, GoldenTree Asset Management decided to dump 11 companies. The largest stake it had sold out was in Constellium NV (NYSE:CSTM) and it was worth $21.14 million, on the account of 1.71 million shares. Next in line among the biggest drops was $19.44 million worth a position in Encana Corp (NYSE:ECA), which counted 1.48 million shares. The fund also said goodbye to its position in PG&E Corporation (NYSE:PCG), which included 396,215 shares with a value of $18.23 million.
Disclosure: None
This article was originally published at Insider Monkey.
