Columbus Hill Capital Management is a New Jersey-based hedge fund run by Kevin D. Eng. The fund manages an equity portfolio having a total worth of $942.17 million as of September 30, down from over $1 billion a quarter earlier. The fund’s picks returned 12.04% in the third-quarter based on its 33 long positions in billion-dollar companies. That easily beat the market and ranked it in the upper 25% of hedge funds that we track for the quarter.
Hedge funds had a pretty solid run for much of this year, generating positive returns for seven or eight consecutive months (depending on the source) before that streak came to an end in October. The third-quarter was a particularly strong one for the industry, as evidenced by our own data. 659 funds in our system which filed for the June 30 13F reporting period held long positions in at least 5 non-micro-cap stocks, and those funds’ long bets posted 8.3% gains in the third-quarter based on the size of their positions on June 30. That easily bested the performance of S&P 500 ETFs, which returned only 3.3% for the period. Where hedge funds tend to falter is on the other positions in their portfolios (options plays, bonds, etc.), which are there to limit downside risk, but also limit upside potential. That’s why we recommend investors consider hedge funds’ top long bets and share them with readers throughout the year. In this article, we’ll analyze the top picks and performance of Columbus Hill Capital Management, including Williams Partners L.P. (NYSE:WPZ), Continental Resources, Inc. (NYSE:CLR), Pioneer Natural Resources (NYSE:PXD), and Yandex NV (NASDAQ:YNDX).
Columbus Hill Capital Management increased its holding in Williams Partners L.P. (NYSE:WPZ) by 25% in the second quarter, and made no change to its position in the third quarter, ending the period with 1.88 million shares of the company. These shares had a total worth of over $70.16 million at the end of September. The stock returned 9.8% during the third quarter. The stock was in 13 hedge funds’ portfolios at the end of the second quarter of 2016 among those we track, unchanged over the quarter. Appaloosa Management LP was the largest shareholder of Williams Partners L.P. (NYSE:WPZ) among them on June 30, with a stake worth $321 million. Aravt Global, Omega Advisors, and Highland Capital Management also held valuable positions in the company.
Columbus Hill Capital Management more than doubled its stake in Continental Resources, Inc. (NYSE:CLR) in the second quarter, but unloaded 37% of its shares in the third quarter, concluding the period with 836,500 shares of the company valued at $43.46 million. The investment was successful, as the stock returned 14.8% in the third quarter. Of the funds tracked by Insider Monkey, John Labanowski’s Brenham Capital Management has the number one position in Continental Resources, Inc. (NYSE:CLR), worth close to $108.6 million, amounting to 13.9% of its total 13F portfolio. On Brenham Capital Management’s heels is Carlson Capital, led by Clint Carlson, holding a $77.6 million position. Some other members of the smart money that hold long positions consist of Charles Clough’s Clough Capital Partners and Robert Polak’s Anchor Bolt Capital.
We’ll check out two more of the fund’s stock picks on the next page.
Columbus Hill Capital Management dropped its stake in Pioneer Natural Resources (NYSE:PXD) by 61% in the third quarter. Heading into the last quarter of 2016, Columbus Hill had 136,000 shares of the company with a total worth of over $25.25 million. Pioneer Natural’s stock delivered 22.8% gains in the third quarter. At the end of the second quarter, a total of 74 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 21% jump from the previous quarter. More specifically, SPO Advisory Corp was the largest shareholder of Pioneer Natural Resources (NYSE:PXD), with a stake worth $919.2 million. Trailing SPO Advisory Corp was Citadel Investment Group, which amassed a stake valued at $263.9 million. Millennium Management, Viking Global, and Lone Pine Capital were also long the stock.
Columbus Hill added 38,500 Yandex NV (NASDAQ:YNDX) shares to its portfolio in the second quarter, ending the period with over 1.92 million shares of the company, whose value stood at over $40.45 million. However, the stock disappointed the fund, with a loss of 3.7% during the following quarter. The fund took the opportunity to hike its stake by 2% in the third quarter. When looking at the institutional investors followed by Insider Monkey, Dmitry Balyasny’s Balyasny Asset Management has the largest position in Yandex NV (NASDAQ:YNDX), worth close to $71.1 million. The second largest stake is held by Rob Citrone of Discovery Capital Management, with a $65.1 million position. Remaining hedge funds and institutional investors that hold long positions include Kerr Neilson’s Platinum Asset Management, William B. Gray’s Orbis Investment Management.