Soros, Paulson Reduce Bank Stakes; Soros Takes on Facebook

Date : 08/14/2012 @ 7:28PM
Source : Dow Jones News
Stock : Citigroup, Inc. (C)
Quote : 57.72  0.0 (0.00%) @ 9:07AM

Soros, Paulson Reduce Bank Stakes; Soros Takes on Facebook

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   By Liz Moyer and Erik Holm 
 

Hedge fund managers reported significantly reduced--and in some instances eliminated--stakes in big banks, including J.P. Morgan Chase & Co. (JPM) and Goldman Sachs Group Inc. (GS), as well as food companies such as Kraft Foods Inc. (KFT) in the second quarter.

Billionaire investor George Soros's Soros Fund Management LLC eliminated positions in J.P. Morgan Chase and Goldman, as well as Citigroup Inc. (C), according to a regulatory filing late Tuesday. The investment company also reported a new stake in retail giant Wal-Mart Stores Inc. (WMT) and a 341,000-share stake in Facebook Inc. (FB).

John Paulson's Paulson & Co. reported no holdings in Metlife Inc. (MET) and SunTrust Banks Inc. (STI), down from 1.8 million shares and 5.7 million, respectively, at the end of the first quarter. Paulson also reported reduced holdings in J.P. Morgan Chase, Hartford Financial Services (HIG), Capital One Financial Corp. (COF) and Bank of America (BAC).

Meanwhile, Warren Buffett's Berkshire Hathaway Inc. (BRKA, BRKB) reported smaller stakes in consumer giants Kraft and Procter & Gamble Co. (PG).

Berkshire also reported a new position in oil-field-equipment maker National Oilwell Varco Inc. (NOV) and increased stakes in International Business Machines Corp. (IBM) and Wells Fargo & Co. (WFC), a longtime holding.

The changes suggest an uncommonly active quarter for Mr. Buffett and Berkshire's new portfolio managers, Todd Combs and Ted Weschler. In particular, Berkshire's holdings in Kraft and Procter & Gamble dropped significantly. The positions were revealed in Berkshire's quarterly 13F filing, a disclosure required by many large investors.

Berkshire reported its holdings in Kraft were 25% lower at roughly 59 million shares. The food giant is close to completing a split into a global snacks company and a North American grocery business.

Berkshire's stake in P&G fell nearly 20% to about 60 million shares. Berkshire's apparent retreat from the company comes at a key time for P&G, which continues to lose market share and is feeling increasing pressure from activist hedge-fund investor Bill Ackman.

Pershing Square Capital Management, the fund run by Mr. Ackman, has 21.8 million shares of P&G and call options on an additional 8.3 million shares, according to its filing. Pershing also reported it no longer held a stake in Kraft in the second quarter, a change from the previous quarter when it held more than 15 million shares.

Mr. Ackman hasn't revealed specific intentions for P&G but said he is interested in meeting P&G Chairman Bob McDonald. Activist hedge-fund managers often accumulate a sizeable stake in a company by purchasing shares and related options before pushing for corporate changes.

Pershing reduced its Citigroup stake to 1.1 million shares from 26.1 million at the end of the previous quarter.

Another activist investor, Nelson Peltz's Trian Fund Management L.P., reported it no longer had a stake in Dominos Pizza Inc. (DPZ) and lower stakes in Kraft and Tiffany & Co. (TIF) while adding to a position in Ingersoll-Rand Plc. (IR) and reporting a previously disclosed stake in Lazard Ltd. (LAZ).

Trian didn't publicly report all holdings as of the end of June. Confidential information was filed separately with the SEC, the firm said in Tuesday's filing, as it did at the end of the first quarter.

In June, Trian revealed it had taken on a 5.6-million-share stake in investment bank Lazard. In a presentation, Trian said it supported Lazard management's efforts to cut costs and wring more profitability out of the firm, and Trian also pushed for governance changes to Lazard's board.

Trian also increased its holdings of Ingersoll-Rand by 7.5 million shares in the second quarter, according to Tuesday's filing. In the first quarter, the firm reported it held 5.9 million shares. On Monday, Ingersoll-Rand said Mr. Peltz would join its board of directors as he pushes to improve profitability at that company.

--Amy Or and Brett Philbin contributed to this article.

Write to Liz Moyer at liz.moyer@dowjones.com




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