Jacob Gottlieb’s multi-billion-dollar hedge fund Visium Asset Management LP has been making headlines earlier today, as federal authorities filed criminal and civil securities charges against several current and former traders at the hedge fund. The case involving Mr. Gottlieb’s firm focuses on the relationship between Sanjay Valvani, one of the fund’s main portfolio managers, and a former U.S. FDA official, Gordon Johnston. According to prosecutors from the Manhattan U.S. attorney’s office, Mr. Valvani generated ill-gotten trading gains totaling $25 million by gaining inside information from Mr. Johnston about FDA’s pending approvals of generic drug applications. Mr. Valvani was also accused of passing on the inside information to Christopher Plaford, a former colleague, who also netted illegal gains using that information. “I am deeply saddened by today’s events,” Mr. Gottlieb was quoted as saying in a statement. Given all the fuss around New York-based Visium Asset Management, Insider Monkey decided to have a look at the fund’s top equity holdings as of the end of the first quarter of 2016.
Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see more details here).
#5. Centene Corp (NYSE:CNC)
– Shares owned by Visium Asset Management as of March 31: 1.68 Million
– Value of Visium Asset Management’s holding as of March 31: $103.67 Million
Visium Asset Management LP acquired a new stake of 1.68 million shares of Centene Corp (NYSE:CNC) during the first three months of 2016, which was worth $103.67 million at the end of the March quarter. The new stake accounted for roughly 1.8% of the fund’s entire portfolio at the end of the quarter. The Patient Protection and Affordable Care Act, usually referred to as Obamacare, has turned out to be unprofitable for most health insurers, but Centene is among the few insurers that are making money on Obamacare plans. In late March, the health insurer completed the $6.0 billion-acquisition of managed care organization Health Net. The freshly-swallowed target offers health care services through health plans and government-sponsored managed care plans and will enable Centene to boost its market share while other insurers are scaling back their selling plans on exchanges. Centene shares are up a little less than 2% year-to-date. Israel Englander’s Millennium Management owns 1.31 million shares of Centene Corp (NYSE:CNC) as of the end of March.
Head to the next pages of this article, where we will reveal the other largest equity positions in Visium Asset Management’s portfolio as of the end of March.