Kyle Bass's Hayman Advisors leads our universe of managers with the best performance so far this year for the Top 10 Holdings clone category. Any investor following Mr. Bass's clone would have returned an impressive 30.9% through 6/28/2011 compared to an 18.9% average 2011 YTD performance amongst the the 25 best performing clones in the same category.
Hayman Advisors is a Dallas-based hedge fund founded Mr. Bass in December 2005. Prior to forming his fund, Mr. Bass worked as a Senior Managing Director at Bear, Stearns & Co., and a Managing Director at Legg Mason. Taking a closer look at this clone's holdings for the year, we can dissect the largest YTD winners.
- HFF (NYSE: HF), a commercial real estate mortgage services company. The portfolio began the year with this stock as a carryover from the 11/20/2010 rebalance period. From the beginning of the year when the stock traded at $9.66/share to when the clone sold out of the position on 5/20/2011 at $16.65/share the stock returned a whopping 72.4%. Investors in this clone would have actually entered HF on 2/19/2010 when the stock traded at $6.20/share and would have a realized gain of 169% at the 5/20/2011 sell out date.
- Six Flags Entertainment (NYSE: SIX), the entertainment park company's stock has had stellar performance since it emerged from bankruptcy in June 2010 when the stock debuted at $18.18/share. The company was able to wipe out most of its debt by essentially handing itself over to its bondholders which included mainly hedge funds such as Stark Capital. Since then, the stock has more than doubled to $37.85/share as of yesterday's close. An investor in Hayman's Top 10 Holding clone would have entered the stock at $25.93/share on the 11/19/2010 rebalance date and held it until 5/20/2011 selling out at a price of $38.11/share for gain of 47% gain. The 2011 gain on the trade is 40%.
- Electronic Arts (Nasdaq: ERTS), a look at the five year price chart for this game developer is enough to scare away the most opportunistic investor. At yesterday's close of $22.55/share (6/28) the stock is trading at about a third of it's five year high of $61.40/share. Still the stock has come back significantly from it's Q4 2010 lows since early this year, management guided higher on 2011 revenues. An investor in Hayman's clone would have entered this stock at $15.79/share on the 8/20/2010 rebalance date and sold out of the stock on 5/20/2011 at $23.64/share for a gain of 50%. The 2011 gain on the trade is 44%.
The table below summarizes the clones largest winners and losers to date. Following this clone since inception when Hayman Advisors first began submitting public filings (Q3 2009), an investor would have returned 32.6% vs. 16.6% for the S&P 500 total return index.
Disclosure: Maz Jadallah is CEO of AlphaClone LLC, a research and investment management firm that tracks hedge funds. The firm currently holds shares of Electronic Arts and Six Flags on behalf of investment clients.
