The 50 largest hedge funds increased their equity exposure by 3% despite nearly half of the managers (twenty-three of fifty) showing a decrease in equity assets for Q3 2012.
On a security-level, two of the stocks that received the most interest during the quarter included AIG and Capital One Financial Corp. The aggregate portfolio of funds more than doubled their exposures, as the market value acquired was 210.7% and 111.2%, respectively, of the starting portfolio values in Q3. As the second and fourth largest institutional buyers of AIG over the quarter, OZ Management LLC and Third Point Management Co. LLC were the most bullish of the top 50 hedge funds. Both investors are now among the top ten largest shareholders of AIG, and each has over ten percent of its equity portfolio exposure in the stock (10.8% and 14.7%, respectively).
On the other hand, while Apple remained in the majority of the hedge fund portfolios and remained the top holding of 12 of the 50 hedge fund companies, the stock experienced the largest decrease in holding value of all stocks in the funds’ aggregate portfolio in Q3 2012. The portfolio of funds reduced their exposure by 1.8 million shares over the quarter, or $1.2 billion at Apple’s quarter-end price of $667.11. The funds’ shifting sentiment towards Apple seems to be prescient in this case—the stock closed the quarter just 5% off its current 52-week high, and has since dropped 20.9%. The most active sellers in the third quarter included Lone Pine Capital LLC, Renaissance Technologies LLC, and Greenlight Capital, Inc. Third Point Management Co. LLC, however, was a large buyer over the quarter.