Seth Klarman’s Baupost Group has filed a 13F with the SEC revealing its equity positions at the end of 2014. Klarman’s equity portfolio dipped in value to $5.09 billion at the end of the year from the $5.74 billion invalue it held at the end of the third quarter. The bulk of that change came from a large move away from his former top pick, Micron Technology, Inc. (NASDAQ:MU), which fell from being by far the largest position in his portfolio, all the way down to third. The top five picks detailed below form the bulk of Klarman’s portfolio, representing over 60% of its value.
Baupost Group was founded by Klarman in 1982, and has consistently been one of the top performing hedge funds ever since, with net gains of $16 billion through its first three decades of operation. The fund’s equity portfolio has traditionally represented only a small portion of its assets under management, as the fund focuses instead on value investing and risk management. On that front, Klarman made a move into depressed energy stocks last quarter, with some new positions, and a bold push into his top pick.
That top pick is Cheniere Energy, Inc. (NYSEAMEX:LNG), which Klarman added 2.61 million shares of during the quarter, giving him 13.81 million total. Klarman wasn’t done there, as earlier this year, he also revealed increasing his position all the way up to 24.81 million shares in a 13G filing, adding an additional 11 million shares between the end of 2014 and January 9, 2015. Nor is Klarman the only one making a big move into Cheniere Energy; Andreas Halvorsen’s Viking Global also disclosed a massively increased position in the Houston, Texas-based company recently.
Cheniere Energy, Inc. (NYSEAMEX:LNG) is an interesting study in that it hasn’t been hit tremendously hard by the sinking oil prices. In fact, shares soared 60.91% during 2014, and are up another 9.22% in 2015, which speaks volumes about the overall potential for the business, despite energy prices likely being depressed for some time. Cheniere is in the process of building a liquified natural gas pipeline that will include nine trains to haul gas from its plants to various destinations.
ViaSat, Inc. (NASDAQ:VSAT) is Klarman’s second largest position, and one which remained unchanged during the fourth quarter at 11.53 million shares. ViaSat has been in Klarman’s portfolio for several years, and his position has mostly remained unchanged during that time. While ViaSat has been a successful investment for Klarman overall, it has foundered over the past stretch of nearly two years, down 11.11% since May 24, 2013, a week after shares soared nearly 50% on the news that Boeing Co (NYSE:BA) would build the ViaSat 2.