Appaloosa Management LP
David Tepper

David Tepper, the money manager with one of last year’s top-performing hedge funds, bought four U.S. airline stocks and raised his Citigroup Inc. stake by 73 percent in the fourth quarter, a regulatory filing shows.

His Appaloosa Management LP’s holdings in Citigroup rose to 138.1 million common shares at yearend from 79.7 million shares at Sept. 30, according to a Form 13F filed yesterday with the U.S. Securities and Exchange Commission. The shares of New York- based Citigroup had a market value of $457.2 million, making it the second-biggest position with about 13 percent of the holdings reported in the filing.

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Tepper invested in bank stocks as they declined during the market rout of early 2009, then pocketed gains when the financial industry recovered in April and May. That helped his flagship fund, Appaloosa Investment LP, deliver a 117.3 percent return for the nine months ended Sept. 30, the best showing among hedge funds with assets exceeding $1 billion, according to Bloomberg data.

Appaloosa also acquired 11 million common shares of Wells Fargo & Co. in the quarter, supplementing its holdings of the bank’s preferred stock. According to Bloomberg data, financial stocks comprised 86 percent of the $3.4 billion in holdings listed in the Form 13F as of Dec. 31.

The SEC requires money managers who oversee more than $100 million in U.S. equities to report their holdings on a Form 13F within 45 days of the end of each quarter. The filing must include all holdings in stocks that trade on U.S. exchanges, as well as options and convertible debt.

Airlines

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Appaloosa’s hedge funds invested in four U.S. airline companies during the quarter: AMR Corp., Delta Air Lines Inc., UAL Corp. and US Airways Group Inc. The firm’s shares in the airlines had a combined market value of about $133 million at yearend.

AMR, based in Fort Worth, Texas, is the parent of American Airlines, while Chicago-based UAL owns United Airlines. Delta is based in Atlanta and US Airways is in Tempe, Arizona.

Tepper, whose firm is based in Short Hills, New Jersey, didn’t immediately return a telephone call for comment.