Hedge fund Baupost is up 60 percent in its roughly $4 billion stock portfolio, points out an article in Gurufocus, but that might not tell the whole story.

Seth Klarman Baupost

Sources intimate with Seth Klarman’s operation indicate the hedge fund overall is actually in single digits through the first quarter.

Baupost manages over $27 billion in assets, making it among the largest hedge funds in the world – its highly touted $4 billion stock portfolio is but a percentage of its overall holdings.

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Baupost heavily invested in real estate

As first reported in ValueWalk, this year Baupost is heavily invested in real estate, including Spanish shopping centers, and is known to have exposure to asset backed securities and debt in European periphery countries.

When asked about concerns that the 60 percent number reported in the article might distort investor expectations, knowledgeable sources were unfazed.  “Baupost does a very robust job of communicating performance with their investors,” a source intimate with Baupost operations and performance said. Baupost investors are considered among the most sophisticated in the hedge fund community.

Baupost’s successful investments in Idenix, RF Micro Devices and Keryx

The article in question accurately highlights Baupost’s most successful investments in what might be considered the speculative sleeve of the equity portfolio. The focus was on Idenix Pharmaceuticals Inc (NASDAQ:IDIX), up nearly 400 percent, RF Micro Devices, Inc. (NASDAQ:RFMD), up 61 percent and a relatively mild performer, Keryx Biopharmaceuticals (NASDAQ:KERX), which was up only 7 percent year to date.

The stocks mentioned in the article largely were the high flyers that benefited from developing drug innovations, acquisitions or other “homerun” type investing outcomes. The Baupost Group stock portfolio is said to have a separate sleeve for aggressive plays along with a sleeve for more conservative value plays and consistent dividend plays.

Idenix is a biopharmaceutical company developing treatments for human viral diseases, the article noted, specifically hepatitis C. It has already successfully discovered treatments for hepatitis B and HIV/AIDS. On June 9, Idenix Pharmaceuticals Inc (NASDAQ:IDIX)’s shares rocketed as Merck agreed to acquire the company at $24.50 per share for Idenix, valuing the company at $3.85 billion. Baupost purchased the shares near $6 per share.

Seth Klarman: Fed Created Truman Show Style Faux Economy

In March of this year, ValueWalk was first to report on Klarman’s year ending letter to investors, one noted by observers as potentially the fund’s manager’s most interesting and insightful among a history of highly regarded letters. In the investor letter, Klarman memorably said Fed Created Truman Show Style Faux Economy and went on to outline the economic reality in a debt ridden world with an honesty rarely observed in mainstream communication.

Baupost is known to have a 2.27 percent stake in Banco Espirito Santo SA (ELI:BES), a stock in a downward spiral in the middle of Portugal’s debt crisis, as first reported by VW yesterday.