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The Bank of New York Mellon Corporation (BK), Goldman Sachs Group Inc (GS) and Wells Fargo & Co (WFC): Horseman Capital Management Reduces Exposure in Its Top Holdings

John Horseman’s Horseman Capital Management is following the same route as many of its peers, trimming its exposure to US equities. The top three holdings of the fund continue to be The Bank of New York Mellon Corporation (NYSE:BK), Goldman Sachs Group Inc (NYSE:GS) and Wells Fargo & Co (NYSE:WFC), all being financial sector stocks.

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Though, John Horseman founded London-based hedge fund, it’s Russell Clark, an Australia born fund manager, who oversees the day to day activity of the fund. Horseman was ranked no. 15 in Alpha magazine rich list for the year 2008, when he earned himself $180 million years by betting on the financial crisis. The following years after 2008 were not as good for Horseman as he continued to be bearish on the market and wasn’t able to profit from the bull-run that started post the financial crisis.

Horseman is a long-short hedge fund, but is known for its short bias. However, the short bias doesn’t come in between the fund generating good returns for its investors as was proven by Clark last year when his Global Strategy fund was net short by 42% by the end of October 2013, but was still up 14.7% for the year. The returns may not sound outstanding, until one brings to the picture the S&P500, which was up by 23% in the same period that Clark was net short.

The Bank of New York Mellon Corporation (NYSE:BK) is the top holding of the equity portfolio of the fund, constituting 11.7% of the equity portfolio by market value. In the third quarter, Horseman Capital Management sold 70,300 shares in the company and currently owns over 800,000 shares. Jean-Marie Eveillard’s First Eagle Investment Management and Mason Hawkins’ Southeastern Asset Management are two of the largest shareholders in The Bank of New York Mellon Corporation (NYSE:BK) and as of June 30, 2014, held over 27 million and over 34 million shares of the company, respectively.

Goldman Sachs Group Inc (NYSE:GS) is the second-largest holding in Horseman Capital Management’s equity portfolio. The fund trimmed its exposure to the company by 8% or 13,600 shares in the third quarter of 2014. It now owns 150,400 shares of Goldman Sachs Group Inc (NYSE:GS), valued at over $27 million.Among other institutional investors that are bullish on the company are Warren Buffett’s Berkshire Hathaway and Boykin Curry’s Eagle Capital.As of June 30, 2014, Berkshire Hathaway owns over 12 million shares and Eagle Capital owns over 2.8 million shares of Goldman Sachs Group Inc (NYSE:GS).

The third spot in Horseman Capital Management’s US holdings by market value is taken by Wells Fargo & Co (NYSE:WFC) which is one of the biggest banks in the World. Here too, the fund trimmed its exposure by 8% or 48,000 shares in the third quarter of 2014. By the end of third quarter, it held over 529,000 shares of the company, valued at over $27 million. Berkshire Hathaway is a major investor in Wells Fargo & Co (NYSE:WFC) too, it held over 430 million shares of the company by the second quarter of 2014. Ken Fisher’s Fisher Asset Management is another fund that is bullish on Wells Fargo & Co (NYSE:WFC) and as of June 30, 2014, owns 18.5 million shares of the company.

Disclosure: None

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