Sandler Capital Management which manages long/short equity hedge funds with assets close to $1.7 billion was burned in the short book in the last quarter, which is exactly what happened to most equity hedge funds. After a +2.06% return last quarter, the Sandler Offshore fund is up 3.91% for the year. The gross return for the short book was down 5.8% while the long book of the offshore fund was up 8.8%, according to a shareholder letter reviewed by ValueWalk.
Sandler Capital new position
Sandler Capital bought new positions in Affiliated Managers Group, Inc. (NYSE:AMG) and Comcast Corporation (NASDAQ:CMCSA) in the third quarter. The fund also added a position in Google Inc (NASDAQ:GOOG). The fund believes that Google has an attractive business model with a very profitable AdWords campaign which has the ability to generate solid revenues.
Take a look at what Stanley Druckenmiller has to say about Google, his largest position.
The position in Affiliated Managers Group, Inc. (NYSE:AMG), which is an investment management company, was initiated based on the new partnerships the company has made with asset managers, PE firms and hedge funds. AMG is set to announce earnings on November 5, and shares are up 55% YTD. AMG has investments in Yacktman Asset Management, Clarfeld Financial Advisors and others.
Comcast Corporation (NASDAQ:CMCSA) happens to be a favorite with several other hedge funds as well, including Lansdowne Partners, Viking Global and Blue Ridge Capital. Sandler likes Comcast because of the consistent earnings record and cash flow. The company also likes rewarding shareholders with dividends and buybacks. Recently Comcast ended its revenue-sharing agreement with Liberty Media Corp (NASDAQ:LMCA). The cable company reached an agreement with John Malone’s media conglomerate to sell its stake in Liberty for $417 million. Comcast currently has a $2 billion shares buyback program for 2013.
Sandler Offshore sold positions
Sandler Offshore sold positions in Illumina, Inc. (NASDAQ:ILMN), FEI Company (NASDAQ:FEIC) and Verisk Analytics, Inc.(NASDAQ:VRSK) in Q3.
The fund thinks that consumer spending will reduce in the later part of this year and more companies will miss earnings forecast. As a result the fund has reduced its exposure in this area while increasing long exposure to other sectors. However, holdings in Consumer Discretionary was the fund’s best performing area in the last quarter, adding +1.92% to gross basis. The fund has reduced overall exposure as growth in U.S. slowed down and the budget debate got more contentious.