Seth Klarman’s Baupost Group is one of the largest hedge funds, with over $24 billion under management. Like all hedge funds, Baupost is required to disclose US common equity positions every quarter in 13-Fs. However, foreign holdings are not disclosed in the 13-Fs. The largest holding is an ADR stake in British Petroleum (BP).
In the hedge fund’s 2011 annual letter, they disclosed buys in private companies and mentioned recent purchases in Europe, without giving any names. The letter mentioned an expansion of the London office, as the hedge fund has been finding value due to large selling in Europe.
However, we have just discovered that Baupost’s largest disclosed equity holding (at least at the time of the purchase) was Vivendi SA (EPA:VIV) (VIV FP). The purchase was recently disclosed in Vivendi’s 2011 annual report.
Baupost owned 25.5 million shares as of February 29th, 2012; then worth close to $530 million using a ratio of 1.3:1 for euros to dollars. The $550million figure comes from looking at where Vivendi’s shares traded in 2011 and early 2012.
Five year stock chart below:
The stock has had a large decline, and the stake are likely worth closer to $425 million currently. It is possible, that Klarman bought more shares after the decline, but we are just guessing.
His hedge fund now owns close to 2% of the giant French multinational mass media and telecommunication company.
A spokeswoman for the company declined to comment on the investment.
The company looks cheap from a valuation perspective, and Klarman likes media companies. Klarman also owns a large stake in another media company, News Corp.
Below are some valuation metrics from Bloomberg:
Additionally, this purchase matches a recent trend by the fund, to purchase stakes in large companies. Baupost in the past has tended to invest in small and obscure companies. However, recently the hedge fund has purchased stakes in large companies such as Microsoft, BP, Hewlett Packard.
The largest shareholders are listed below in the chart. Baupost Group is the 8th largest shareholder according to Bloomberg: