interesting
Soros Sells BP, Chevron, Oil Holdings, Buys Microsoft (Update2)
2004-08-17 10:28 (New York)
Soros Sells BP, Chevron, Oil Holdings, Buys Microsoft (Update2)
(Adds average return for macro funds in sixth paragraph.)
By Peter Woodifield
Aug. 17 (Bloomberg) -- Soros Fund Management LLC, the hedge
fund company headed by billionaire George Soros, sold stakes in oil
companies including BP Plc and ChevronTexaco Corp. in the second
quarter as crude prices moved toward record highs.
The stockholdings of the New York-based firm shrank 24 percent
in the three months to $1.33 billion after it sold stakes worth
more than five times what it bought, reducing the number of
investments to 96 from 108, according to regulatory filings.
Purchases included Microsoft Corp., the largest software maker.
``Oil companies have outperformed strongly,'' said Jason
Kenney, an analyst at ING Financial Markets in Edinburgh. ``Maybe
Soros is saying this is the best it's going to be for some time.''
Investors worldwide scrutinize Hungarian-born Soros's holdings
after the 74-year-old made $1 billion in 1992 betting against the
pound and forcing the British government to abandon a peg to a
basket of European currencies.
The quarterly Securities and Exchange Commission filings show
only the stocks the Soros fund owns. The decline in its equity
holdings suggests that Soros is putting his cash into other assets
such as bonds or currencies.
Soros's $8.3 billion Quantum Endowment Fund, once the world's
largest hedge fund, has fallen 0.5 percent in the seven months to
the end of July. Other so-called global macro funds, which invest
in stocks, bonds, currencies and commodities, have returned 5.2
percent on average, according to the CSFB/Tremont hedge fund index.
Oil Stakes
Soros's stakes in BP, the world's second-largest oil company,
ChevronTexaco, the second-largest U.S. oil company, ConocoPhillips,
the No. 3 U.S. oil company, Occidental Petroleum Corp., the fourth-
largest U.S. oil producer, Marathon Oil Corp., the fifth-largest,
and Californian producer Unocal Corp. were worth a combined $372
million at the end of the first quarter, according to Bloomberg
calculations from Soros filings.
The price of all six companies rose by between 2 percent and
12 percent during the second quarter.
Soros Fund Management sold stakes in about 30 companies during
the second quarter, including Time Warner Inc., the world's largest
media company, and Amazon.com Inc., the biggest Internet retailer,
based on the first- and second-quarter filings.
The holdings the firm sold were worth about $610 million at
March 31, based on values in a May 17 filing. Its purchases of
stock in companies it didn't previously own were valued at $114.5
million on June 30, according to a filing late yesterday.
Michael Vachon, a spokesman for Soros, said the firm doesn't
comment on its financial transactions.
Barrier Therapeutics
The biggest single new investment was a holding in Barrier
Therapeutics Inc., a developer of skin treatment products, worth
$38.6 million at the end of June.
As well as buying a $5.6 million stake in Microsoft, Soros
invested $4.7 million holding in Automatic Data Processing Inc.,
the world's biggest paycheck processor and added to holdings in Sun
Microsystems Inc., the fastest-growing server-computer maker,
according to the filing yesterday.
It also took a put option over 150,000 Bank of America Corp.
shares, which were worth $12.7 million. That gives Soros the right
to sell the shares within an agreed period.
Soros Fund Management's largest investment remained its $346.8
million holding in JetBlue Airways Corp., the largest carrier at
John F. Kennedy International Airport in New York. The shares rose
16 percent during the quarter. The stake represents 26 percent of
the fund's assets.
Soros left Hungary for England in 1947 and moved to the U.S.
in 1956 to start his investment fund.
After the end of communism in 1989, Soros became more involved
in philanthropy in Eastern Europe, founding the Central European
University in Budapest, which runs courses on democracy, human
rights and social sciences.
America Coming Together, a political group financed by Soros
to defeat President George W. Bush in the November election, raised
$12.5 million last year, disclosure records show.
