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Jamie Zimmerman and Litespeed Management’s Special Situations Plays

Litespeed Management LLC was founded by Jamie Zimmerman in October 2000. Litespeed is an event-driven hedge fund focusing on special situations, distressed securities, and bankruptcies. Zimmerman returned 118% between October 2000 and December 2005, vs. -13% for S&P 500 index. The firm has around $1 Billion in assets under management. Before founding Litespeed Management, she was the head of research for risk arbitrage situations portfolio at Toronto-Dominion Bank. Zimmerman received a B.A. degree from Amherst College in 1981, followed by a J.D from the University of Michigan Law School, and a Masters in English Literature from the University of Michigan’s Horace Rackham Graduate School in 1984.

02 Jamie Zimmerman

As of March 31, 2011, Litespeed had $345 Million in its 13F portfolio. The major investments were in healthcare, consumer goods, basic materials and financial sectors. Zimmerman had 6 positions in S&P 500 constituents and these stocks lost 1.5% in the second quarter. Below is the table showing the top holdings of Litespeed Management:

No. Security Ticker Value (x$1000) Activity % Port
1.) Tenet Healthcare Corp THC $44,328 68% 12.83%
2.) Airgas Inc ARG $38,590 22% 11.17%
3.) Theravance Inc THRX $34,899 New 10.1%
4.) C I T Group Inc New CIT $34,870 53% 10.09%
5.) Coca Cola Enterprises CCE $29,757 -8% 8.61%
6.) Fortune Brands Inc FO $28,288 New 8.19%
7.) Lyondellbasell LYB $19,047 New 5.51%
8.) Eagle Materials Inc EXP $15,139 -13% 4.38%
9.) C N A Surety Corp SUR $14,691 New 4.25%
10.) United States Oil Fund L P USO $12,993 New 3.76%
11.) Lubrizol Corp LZ $10,717 New 3.1%
12.) S R A International Inc SRX $10,675 New 3.09%
13.) Leapfrog Enterprises Inc LF $10,277 New 2.97%
14.) E X C O Resources Inc XCO $9,336 New 2.7%
15.) Integral Systems Inc ISYS $8,529 New 2.47%
16.) Gray Television Inc GTN $7,183 35% 2.08%
17.) Anadarko Petroleum Corp APC $6,963 31% 2.01%
18.) Hartford Financial Svcs Grp Inc HIG $5,685 New 1.64%
19.) Boise Inc BZ $1,130 New 0.32%
20.) Geoeye Inc GEOY $902 New 0.26%
21.) Northwestern Corp NWE $803 New 0.23%
22.) Solutia Inc SOA $455 New 0.13%

Zimmerman initiated a brand new position in Fortune Brands Inc (FO) during the first quarter. She bought 457,000 shares of this stock, which has a value of $28 million as of March 31, 2011. Bill Ackman’s Pershing Square has more than 16,000,000 shares of (FO) which has a market value of around $1 billion.

Litespeed’s top five stocks, which account for more than 50% of its total holdings, are Tenet Healthcare Corp (THC), Airgas Inc (ARG), Theravance Inc (THRX), CIT Group Inc New (CIT) and Coca Cola Enterprises (CCE) respectively.

Jamie Zimmerman’s biggest position in the portfolio is Tenet Healthcare Corp (THC). Zimmerman increased her holdings by 68% in the first quarter of 2011. Litespeed has nearly 6 Million shares of THC, which is worth approximately $45 Million. Frank Brosens’ Taconic Capital has the largest position in Tenet Healthcare (with 9,250,000 shares) among the 300+ hedge funds we are tracking. Mason Capital Management, Perry Capital and WS Capital have also more than 6,000,000 shares of Tenet Healthcare Corp (THC). Tenet received a $7.3 Billion offer from Community Health earlier this year.

It is clear that Zimmerman invests in acquisition targets such as Tenet and Airgas, firms emerging from bankruptcy, potential spin-offs, and merger arbitrage plays. Her track record shows that this has been a moderately profitable investment strategy.

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