James Dinan founded his own investment management team York Capital Management in 1991 after previously working as an investment banker at Donaldson, Lufkin & Jenrette and in merger arbitrage at Kellner DiLeo & Co. With $3.6 billion of seed money, James Dinan was able to put his skills to work and managed to grow his fund, which amassed more than $11 billion in equity portfolio at the end of 2014. Many companies in which Mr. Dinan invested represent safe merger arbitrage bets. However, in addition, York is also investing in some companies with a great chance of generating promising returns. The fund’s last 13F filing showed a diversified equity portfolio that included American Airlines Group Inc (NASDAQ:AAL), Allergan, Inc. (NYSE:AGN) and DISH Network Corp (NASDAQ:DISH). In addition, the fund disclosed around 40 new stakes in companies including Yahoo! Inc. (NASDAQ:YHOO), Canadian Pacific Railway Limited (USA) (NYSE:CP), and Tribune Media Co (NYSE:TRCO).
The largest new holding of York Capital at the end of 2014 was represented by Yahoo! Inc. (NASDAQ:YHOO). In its latest 13F filing, York reported a $474.69 million stake that contains 9.40 million shares. Aside from being the largest new position, Yahoo also represented the second-largest stake in terms of value, equating to 4.27% of York’s total equity portfolio.
Mr. Dinan is not the only investor bullish on Yahoo! Inc. (NASDAQ:YHOO), as the latest round of 13F filings showed. In fact, Yahoo is one of the companies in which investors poured the most capital into during the October-December period. Among 737 funds that we track, 99 reported ownership of Yahoo shares in their 13F filings, the aggregate value of their stakes amounting to $7.59 billion, versus 94 funds with $5.31 billion in the previous quarter. The company was also been one of the largest new positions of billionaire Daniel S. Och’s OZ Management, which held 8.99 million shares, valued at $454.16 million at the end of 2014. Other investors betting big on Yahoo! Inc. (NASDAQ:YHOO) include activist investor Jeff Smith of Starboard Value and Christian Leone of Luxor Capital Group. Starboard held 7.72 million shares of Yahoo at the end of 2014, after initiating a stake and going activist a few months earlier, while Luxor initiated a $465.61 million position that contains 9.22 million shares.
York Capital also initiated a stake in Canadian Pacific Railway Limited (USA) (NYSE:CP), reporting ownership of 1.16 million shares, valued at $222.91 million. The stock of the rail transportation company appreciated by 27% during 2014, which resulted in a substantial payoff for investors. As our data shows, the number of funds holding shares of Canadian Pacific Railway Limited (USA) (NYSE:CP) decreased significantly during the fourth quarter, with 34 funds reporting long positions in the company, including seven billionaires, versus 43 funds a quarter earlier. However, the total value of the stakes held by funds that we track surged to $6.36 billion, from $5.84 billion.
Once the target of great activist investor Bill Ackman of Pershing Square, Canadian Pacific’s stock has been very volatile in the second half of 2014 as the drop in oil prices triggered investors to review their positions regarding the company’s revenue flow from oil deliveries. Nevertheless, in its last financial report, the company posted growth in both revenue and net income. Bill Ackman, who managed to gain control of Canadian Pacific Railway Limited (USA) (NYSE:CP)’s board in 2012 and replace the management team, was one of the largest shareholders of the company, owning 13.94 million shares, valued at $2.69 billion.
Molson Coors Brewing Company (NYSE:TAP) is another new addition to York Capital’s equity portfolio. The fund acquired 2.85 million shares of the company, valued at $212.15 million. The producer of beer has held a strong position on the North American market and has seen its stock gain more than 30% over the last 52 weeks. At the end of 2014, a total of 54 funds from our database reported holding some $1.35 billion worth of Molson Coors Brewing Company (NYSE:TAP)’s stock. Kenneth Mario Garschina’s Mason Capital Management and Ken Griffin’s Citadel Investment Group are two other shareholders of Molson Coors Brewing Company (NYSE:TAP), but opposed to York, both investors trimmed their stakes last quarter. Mason reported 3.25 million shares, down by 17% on the quarter while Citadel held 1.74 million shares, down by 14%.
In Mead Johnson Nutrition CO (NYSE:MJN), York reported ownership of 1.57 million shares worth $157.89 million. The stock might have been another merger arbitrage bet of Mr. Dinan’s, as there have been rumors since last fall that French food giant Danone SA was looking into a possibility of taking over Mead Johnson Nutrition CO (NYSE:MJN). A deal was not announced and instead Danone bought a $556-million stake in Yashili International Holding, a Chinese infant formula maker. Aside from York, another shareholder of Mead Johnson Nutrition CO (NYSE:MJN) is Citadel Investment Group, which trimmed its stake by 15% to 1.53 million shares.
Last but not least is Tribune Media Co (NYSE:TRCO), a $6.50 billion broadcast station group. York disclosed holding 2.44 million class A shares of the company, valued at $146.02 million. Aside from Mr. Dinan, a bunch of other investors reported new stakes in Tribune Media Co (NYSE:TRCO), including Howard Marks of Oaktree Capital Management, who disclosed a $1.12 billion stake that contains 18.77 million class A shares. The class A stock of Tribune Media Co (NYSE:TRCO) started trading on the New York Stock Exchange at the beginning of December 2014.
Disclosure: None
