Balyasny Asset Management’s, BAM, funds lagged the benchmark S&P 500 index by a wide margin. The Atlas Global (AGI) and Atlas Fundamental Trading (AFT) returned -0.29 and +1.4 percent respectively in the first quarter. BAM manages in excess of $3.7 billion, out of which $1.5 billion are under the Atlas Global Fund while Atlas Fundamental Trading manages $160 million. Both funds have almost no correlation to the S&P 500 index which is also exemplified by their low returns in a period when S&P 500 (INDEXSP:.INX) rose over 10 percent.
BAM is increasing its standing in Asian investments and generally in the real estate and utilities sectors. the fund is also bullish on Japanese financials and exporters and expects the investment to pay off in this quarter. AGI fund lost in the energy sector last quarter. BAM’s new research team is focusing on building short ideas. The fund has had some luck in shorts in Chinese real estate and is also focusing on fraudulent companies in the healthcare space. Jim Chanos has been a long time advocate of shorting Chinese stocks, especially real estate and financial related.
One of the winning investments of BAM has been Chicago Bridge & Iron Company N.V. (NYSE:CBI) which is also one of the largest allocations in both the AGI and AFT funds. Interestingly here again, BAM’s investment thesis ties in with Chanos who has held a long position in Chicago Bridge & Iron Company N.V. (NYSE:CBI), which he exited in Q4. YTD, Chicago Bridge is up over 20 percent. BAM believes that there is significant room for the company to grow and that achieving the share price of $80 is possible in this year. According to Balyasny’s analysis, the company trades lower than 10x earnings of FY2014.
Balyasny has also held a long position in Penn National Gaming, Inc (NASDAQ:PENN), operator of Hollywood Casino Columbus, for a while now. BAM has increased its position considerably after the company broke its REIT and operations business into separate entities. The fund thinks that the market has not priced in the impact of this development which has made Penn National Gaming, Inc (NASDAQ:PENN) the first and only gaming REIT. The spin-off will take effect late in the year. BAM expects the stock to rise to $70 in the course of a year.
The major strategy applied by BAM funds is equity long/short. The fund keep low net exposures, which means that the long and short portfolios have roughly equal weights. Balyasny is opening its San Francisco office soon in May and is looking to add analysts and portfolio managers to its team in San Francisco. BAM is in need of experts in the field of technology, media , internet and financials.