Magnetar under the magnifiying glass…

August 14, 2012

Today’s a big day for another filing that we tend to pay less attention to here at footnoted: the 13F. That’s because there’s a lot of other very competent sites including our friends at both Market Folly and Whale Wisdom that are all over the 13Fs.

But amended 13Fs, especially those that are amended due to the SEC’s Confidential Treatment rules, (this piece in the WSJ late last year provides a good primer) are a whole different story. We’re constantly fascinated by those.

So when we saw that Magnetar Financial, the Evanston, IL-based hedge fund that manages around $1.4 billion (down from $2.1 billion a year ago) filed 3 different amended 13Fs along with its latest 13-F for the quarter ended June 30 this morning, we couldn’t help but take a closer look. It was so interesting that we built this little spreadsheet (numbers in millions):

Company 9/30/11 12/31/11 3/31/12
El Paso 3.8 12.3 10.4
Goodrich 2.2 2.5 0
Motorola Mobility 6.8 4.3 5.5

As the 3 different amended filings show, Magnetar, which describes its strategy as event-driven, took big stakes in companies that announced they were being acquired. But the nature of 13Fs, combined with the confidential treatment requests make it a bit difficult to piece things together. Still, we decided to take a shot at it.

What we do learn from today’s new filings is that between September and December 2011, the hedge fund more than tripled its stake in El Paso, whose deal with Kinder Morgan (KMI) was announced in October 2011. Google’s (GOOG) acquisition of Motorola Mobility was announced Aug. 15, 2011. From today’s amended 13Fs, we learned that Magnetar bought 6.8 million shares at some point during the quarter ended Sept. 30, 2011. Whether that was before or after the deal was announced (or changed at all once the deal was announced) is unknown. The 13-F for the quarter ended June 30, 2011, however, shows zero shares of Motorola Mobility, so Magnetar took a very big position over the course of the quarter.

Even more interesting was Magnetar’s interest in Goodrich, whose deal with United Technologies (UTX) was announced on Sept. 21, 2011 — just before the end of the quarter. The amended 13-F filed today shows that they owned 2.2 million shares of Goodrich at the end of Sept. 2011. But this 13-F for the quarter ended March 31, 2011 (filed May 16, 2011) shows that they owned just 15,352 shares. The 13-F for the quarter ended June 30, 2011 shows no position in Goodrich.

The other reason we don’t tend to pay a lot of attention to 13Fs is because we’ve long been skeptical of how much information they actually provide, especially at funds that have dozens or even hundreds of positions. Throw in the fact that these filings are also missing many key details (like short positions) and that the SEC seems pretty generous at granting confidential treatment requests and you have an even bigger puzzle.

Image source: Magnifying glass via Shutterstock

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