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Billionaire Israel Englander’s Top Q4 Moves

Brooklyn-born Israel “Izzy” Englander founded his successful hedge fund firm Millennium Management in 1989, with just $35 million in capital. The New York-based hedge fund currently has approximately $34 billion in assets under management, which are spread across 180 trading teams that employ different strategies under very strict risk management rules. That business model has been very successful for Mr. Englander and his firm over the years, considering the fund’s net average annual return of more than 14% since inception. While the hedge fund industry as a whole struggled to make money for investors in 2015, Mr. Englander’s main Millennium International fund returned 12.65% last year. However, individual investors tracking 13Fs are mostly interested in the performance of hedge funds’ long positions, which they can emulate. In that regard Mr. Englander’s long positions in companies with a market capitalization above $1 billion delivered a negative weighted average return of 2.0%, primarily due to poor performance during the turbulent third quarter of 2015. Leaving the fund’s performance aside, the following article will discuss several noteworthy moves made by Millennium Management during the fourth quarter of 2015.

At Insider Monkey, we track around 730 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details about our small-cap strategy).

Israel Englander
Israel Englander
Millennium Management

Let’s begin our discussion with NextEra Energy Inc. (NYSE:NEE), which represents Millennium Management’s largest equity position as of the end of the final quarter of 2015. The New York-based hedge fund upped its position in the clean energy company by 71% during the last three months of 2015, to nearly 4.00 million shares, which were valued at $415.10 million. The company’s performance primarily relies on its two subsidiaries, FPL and NEER. The former subsidiary is one of the largest rate-regulated electric utilities in the United States, while the latter is the largest North American generator of renewable energy. NextEra Energy Inc. (NYSE:NEE)’s shares have advanced by 10% since the beginning of 2016 and are up by 8% over the past 12 months. Earlier this month, the company’s Board of Directors declared a quarterly common stock dividend of $0.87 per share, up by 13% year-over-year. The $3.08 annual dividend payment generates a current dividend yield of 2.69%. Jim Simons’ Renaissance Technologies increased its position in NextEra Energy Inc. (NYSE:NEE) by 84% during the December quarter, to 721,300 shares.

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The Brooklyn-born billionaire was also very bullish on Biogen Inc. (NASDAQ:BIIB) during the October-to-December period. Mr. Englander and his team lifted their holding in Biogen by 68% during the December quarter, ending the year with a stake of 1.05 million shares valued at $321.88 million. The shares of the biopharmaceutical company are down by 36% over the past year, after having lost 14% year-to-date. Biogen Inc. (NASDAQ:BIIB)’s net product revenue totaled $9.19 billion for 2015, which marked an increase of 12% year-over-year, which was mainly attributable to an increase of 25.1% in worldwide TECFIDERA revenue. However, the company’s recent disappointing stock performance could be partly explained by softening domestic sales of its top-selling sclerosis drug. Currency exchange headwinds and a decrease in revenue from the sale of several products, including AVONEX and TYSABRI, put some weight on the company’s top-line growth in 2015. Andreas Halvorsen’s Viking Global purchased a new stake of 368,864 shares in Biogen Inc. (NASDAQ:BIIB) during the last quarter of 2015.

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