Canyon Capital’s Portfolio Activity

Canyon Capital was founded by Joshua Friedman and Mitchell Julis. In the beginning of 2010, Canyon Capital ranked as the 22nd largest U.S managers. The flagship fund of Canyon Capital, Value Realization Fund, ranked as the 9th most profitable hedge fund in 2010. The portfolio of Canyon Capital is highly diversified. However, U.S equity investments make up only a small portion of the total portfolio. At the end of December 2010, Canyon had $1.32 invested in U.S equities which accounted for only 7% of the assets under management. The investment style at Canyon Capital is value-oriented. They adopt a multi-strategy, event-driven approach for investment in wide range of economic sectors.

Marathon Oil Corporation (NYSE:MRO)

During the second quarter of 2011, Canyon Capital reduced Central European Media Entertainment Ltd (CETV) by 3%, Marathon Oil Corp (MRO) by 16% and Dryships Inc (DRYS) by 52%. All the reduced stocks underperformed since the end of June. Central European Media Entertainment Ltd (CETV) lost 35%, Marathon Oil Corp (MRO) lost 19% and Dryships Inc (DRYS) lost 37%. Here are Canyon Capital’s top stock picks at the end of June:

Chemtura Corp (CHMT) is the largest U.S equity held by Canyon Capital. It makes up 6.79% of their 13F portfolio. During the second quarter Canyon Capital increased the stake in the company by 16%. Canyon Capital has the largest position in Chemtura. Since the end of June, Chemtura has lost 34%. Among the known hedge fund managers, Steven Cohen is also a stakeholder of the company. Steven Cohen’s Sac capital has $13 million invested in the company (view Steven Cohen’s bullish stock picks).

Similar to Bruce Berkowitz’s Fairholme (check out Bruce Berkowitz’ current holdings), Canyon Capital has stake in Bank of America (BAC) and C I T Group (CIT). Bank of America has gained considerable media attention over the past few months as some of the major investors such as Eric Mindich (view Eric Mindich’s stock picks) and John Paulson (see John Paulson’s top holdings) are highly bullish about the company. During the second quarter, Canyon Capital increased stake in Bank of America (BAC) by 8% and in C I T Group (CIT) by 35%. Since the end of June, CIT lost 27% while BAC lost 36%.

Genworth Financial Inc (GNW) is the second largest holding and Lowes Companies Inc (LOW) is the fourth largest holding of Canyon Capital’s 13F portfolio. During the second quarter ending June, Canyon Capital increased stake in Genworth by 30% and in Lowes by 44%. Since the end of June, Genworth lost 36% and Lowes lost 12%. Jonathon Jacobson’s Highfields Capital Management has the largest stake in both the companies (see Jonathon Jacobson’s top stocks). Ken Griffin’s Citadel Investment Group also has $106 million invested in Lowes and $3 million invested in Genworth’s put options (check out Ken Griffin’s current portfolio).

JPMorgan Chase & Co (JPM) is also one of the top favorites of some of the most popular hedge fund managers. Since the end of June, JPM lost 12%. During the second quarter of 2011, Canyon Capital increased stake in the company by 9%. Lee Ainslie is highly bullish about JPM as he increased the stake in the company by 80% during the second quarter (see Lee Ainslie’s other bullish stock picks).