David Zusman’s New Fund Is Worth Tracking: Let’s See What It’s Up To

Talara Capital Management, a hedge fund founded by David Zusman, a former Perella Weinberg Partners portfolio manager, has been catching our attention recently, although it is still quite small and manages about $200 million in assets. This real asset investment partnership is focused on long-term (fundamental) investments on global resource and industrial companies.

Over the past few months, Mr. Zusman’s fund has been making some interesting moves worth tracking. By comparing its 13F filings for the period finished on June 30th and the one concluded on September 30th, we can form a basic idea of the way that Talara’s investments have changed and where they are being directed. Let’s take a look at some basic points:

Cutting down on oil.

Emerald Oil Inc (NYSEMKT:EOX) was the fund’s largest holding in terms of value by the end of the second quarter. Although the stock gained more than 50% in price since the beginning of the year, the third quarter was quite troubled, and this led the fund to sell 379,732 shares. However, it still owns 985,180 shares, valued at approximately $8.1 million.

Emerald Oil Inc (NYSEMKT:EOX)

Talara also sold out its participation -100,000 shares, worth almost $6 million- at Whiting Petroleum Corp (NYSE:WLL). However, the stock price escalated 10% since.

Looking at these, and other moves, like the Jones Energy Inc (NYSE:JONE) –its seventh largest holding by the end of Q2- sell out, one can notice that the fund is moving away from the oil & gas industry.

Where’s the money going?

Talara’s portfolio is turning toward techonology. Its current main holding is ATMI Inc (NASDAQ:ATMI), a tech materials provider with a market cap close to $1 billion. The fund added 209,687 shares to its portfolio during the third quarter. Since that moment, stock price has risen by more than 10%, and its holdings are now worth about $10.4 million.

The bullish sentiment here is most likely encouraged by the company’s position as a supplier for the top semiconductor manufacturers in the world. As semiconductor technologies advance, the firm is also prone to benefit from increased demand for materials, scale advantages and decreasing costs.

Bullish on basic materials.

The firm is also placing big bets–just like on the second quarter- on Ashland, a  specialty chemicals company in which Jana Partners has a big stake. Mr. Zusman’s holdings increased by 5,000 shares during the third quarter, to 99,873 shares, worth $6.6 million.

Rolling toward success.

Similar to the aforementioned case, is that of General Motors Company (NYSE:GM), of which the fund owns 191,241 shares, compared to 160,000 the previous quarter. Its holdings are currently valued at roughly $7.3 million. Finally, also making the fund’s top 5 picks is Harley-Davidson, Inc. (NYSE:HOG). Talara owns 110,000 shares (up from 95,000 on the previous quarter), valued at $7.2 million.

Disclosure: none