Breitburn Energy Partners (BBEP) has been a profitable investment for Klarman but his returns suffered a lot because he was investing early in BBEP. He initially had around $13 million worth of BBEP at the beginning of 2008. The stock price was around $20. Then in September 2008, the stock price started to decline sharply because of the financial crisis. Baupost increased its BBEP holdings around by 5.5 million shares with an average cost north of $15. Klarman was happy with the 30+% decline in stock price. However, the stock price kept declining during the fourth quarter and went as low as $5 and closed 2008 at around $7. Klarman added another 2 million shares. Those investments were the most profitable, he was early with his initial 5.5 million share purchase. Today, Breitburn Energy Partners trades at $21 and Klarman has been trimming his holdings.
At the end of December Seth Klarman had 4.35 Million BBEP shares left in his portfolio. Two weeks ago he reduced his holdings to 2.5 Million. His average price was around $21.50. Baupost is stil the largest hedge fund in BBEP. Alec Litowitz and Ross Laser’s Magnetar Capital had $13 Million in BBEP at the end of December. John Overdeck and David Siegel’s Two Sigma had a tiny position in this stock.