In a recent 13F filing with the Securities and Exchange Commission, David Atterbury‘s Whetstone Capital Advisors disclosed the holdings in its equity portfolio as of the end of March. Founded in 2010, Whetstone Capital aims to achieve superior investment returns by picking companies with a competitive advantage operating in industries experiencing secular growth. A firm believer in value investing, the firm’s portfolio typically has about 15-20 concentrated long positions and 5-10 short positions in struggling companies operating in out-of-favor industries. A high concentration meant that the firm’s top ten holdings constituted about 73.67% of its total equity portfolio, the market value of which stood at $287.12 million at the end of March. The energy sector constituted a whopping 49% of the above value and was represented by three key holdings: Energy Transfer Equity LP (NYSE:ETE), NiSource Inc. (NYSE:NI), and Williams Companies Inc (NYSE:WMB). The Technology sector represented 10% of the holdings with two of the notable contributors being Google Inc (NASDAQ:GOOGL) and Yahoo! Inc. (NASDAQ:YHOO).
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Whetstone has a new top equity holding in the form of Energy Transfer Equity LP (NYSE:ETE) as the fund added an additional 522,800 shares bringing its total ownership to 644,000 shares with a value of $40.80 million. The stake represented 14.21% of the total portfolio value. The fund also has call options underlying 6,900 shares of Energy Transfer Equity LP (NYSE:ETE) valued at $1.57 million. The $36.57 billion energy company is a master limited partnership (MLP) and a general partner to the operating limited partnership, Energy Transfer Partners LP (NYSE: ETP). Through its affiliated companies, Energy Transfer Equity LP (NYSE:ETE) owns about 71,000 miles of natural gas and crude oil pipelines. In its first quarter financial results the company’s EPS of $0.52 missed estimates by $0.18, while revenue of $10.4 billion also came in a hefty $4.64 billion lower than anticipated. Energy Transfer Equity LP (NYSE:ETE)’s stock has appreciated by 16.84% year-to-date nonetheless. Two other funds that had significant holdings in the company are Daniel S. Och‘s OZ Management and James Dinan‘s York Capital Management.
A newly initiated position of call options underlying about 870,400 shares of NiSource Inc. (NYSE:NI) ranked second in Whetstone’s portfolio. Valued at $39.27 million, the stake represented 13.68% of the equity portfolio. The fund also held a long position of nearly 252,800 shares of NiSource valued at $11.16 million. In September of last year the company announced its plan to split into two separate businesses, NiSource Inc. (NYSE:NI), which will be a natural gas and electrical utilities company, and Columbia Pipeline Group, which will be a natural gas pipeline and midstream-focused company. The split is expected to be completed by the middle of this year. The reason for the split given by the company was to enhance ‘strategic clarity and focus’. Phill Gross and Robert Atchinson‘s Adage Capital Management is the largest shareholder of NiSource Inc. (NYSE:NI) within our database.
Whetstone’s also holds and long position and call options on Williams Companies Inc (NYSE:WMB). The long position saw an increase of 70,800 shares during the first quarter to 321,433 shares valued at $16.26 million. The position of call options was underlying 729,628 shares valued at $37.97 million, a dip of 32,373 shares during the quarter. Williams Companies Inc (NYSE:WMB) is another MLP in the fund’s portfolio. The company completed the merger of its limited partnership, Williams Partners L.P. (NYSE: WPZ) and Access Midstream Partners in February this year to form a leading large-cap Natural Gas Infrastructure-focused MLP. Williams Companies Inc (NYSE:WMB)’s stock is up by nearly 11% year-to-date. Keith Meister‘s Corvex Capital held 41.69 million shares of the company, according to its latest filing.
Moving on to Whetstone’s technology picks we find a newly initiated position in Yahoo! Inc. (NASDAQ:YHOO) of 120,000 shares valued at $5.33 million, representing 1.86% of the fund’s portfolio value. Despite a lack of strength in its search and display businesses, some analysts believe that the guidance that Yahoo! Inc. (NASDAQ:YHOO) provided for the second quarter is strong and the fact that the core stub, taking out Alibaba’s and Yahoo Japan’s stakes, is currently trading at a negative value provides an enticing investment opportunity. Aside from Whetstone, two other prominent stockholders of Yahoo! Inc. (NASDAQ:YHOO) are D.E Shaw and York Capital Management.
Whetstone acquired an additional 1,100 Class A shares of Google Inc (NASDAQ:GOOGL) during the first quarter which lifted the total stake to 5,780 shares valued at $3.21 million. The fund also owns Class C shares of the tech giant amounting to 6,780 shares valued at $3.72 million. In an effort to assuage the European Commission, which has been hanging the sword of antitrust violations over Google Inc (NASDAQ:GOOGL)’s neck for quite some time now, the company launched a new Digital News Initiative (DNI). A €150 million ($168 million) fund has been established under the initiative, which with the help of the eight leading European newspapers (in advisory capacity), will be used to promote digital journalism. Boykin Curry’s Eagle Management held about 1.12 million shares of Google Inc (NASDAQ:GOOGL)’s Class C shares at the end of the fourth quarter.
Disclosure: None
