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Investment Ideas What big U.S. hedge funds bought in the latest quarter

People pass a Citbank branch in New York's Financial District.

RICHARD DREW/AP

The flavour of the second quarter for big U.S. money managers was bank stocks, including Morgan Stanley and Citigroup Inc.

Hedge funds Eton Park Capital and BlueMountain Capital Management were among investors that scooped up financials, which as a group are up 15 per cent this year.

Energy companies were also in the spotlight. Activist hedge fund Jana Partners LLC soured on energy stocks as the firm dumped shares of Marathon Petroleum and Hess Corp , while Eton Park's Eric Mindich revealed that he has an option to buy 4.5 million shares of natural gas producer Chesapeake Energy at an undisclosed price.

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It is that time of the year again when hedge funds and other big money managers disclose their U.S. stock holdings at the end of the most recent quarter in so-called 13-F filings.

The filings offer a chance for ordinary investors to see what closely watched money managers like Bill Ackman, Warren Buffett, David Einhorn and Dan Loeb are doing with their investors' money.

The second quarter was a difficult one for stocks and hedge funds. The benchmark S&P 500 fell 3.3 per cent in the period, while funds on average lost 2.7 per cent in the quarter.

The filings from hedge funds, submitted to the Securities and Exchange Commission throughout the day Tuesday, will no doubt reveal some of that tumult in the stock market.

For more on how big money managers traded in the sector quarter, here is a breakdown by sectors and high-profile stocks.

BANKS

Eton Park's Mindich said he owned 5.1 million shares of Morgan Stanley and had the right to acquire another 21.5 million shares at an undisclosed price. At the end of the first quarter, he owned 15 million shares.

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Mindich also made changes in his holding in Citigroup, in which he owned 5.5 million shares at the end of the first quarter and said he had the right to acquire 12.7 million shares at an undisclosed price at the end of second quarter. At the end of the second quarter, he still held warrants to acquire 102.4 million shares, the same number he held at the end of the first quarter.

BlueMountain Capital initiated a new position in Citi, roughly 623,000 shares, and increased its stake in Flagstar Bancorp by 250,000 shares. It owned 233,505 shares of JPMorgan Chase at the end of the second quarter, up from 80,910 shares.

Not everyone was a fan of banks, however.

Dinakar Singh's TPG-Axon Capital Management sold its holdings in JPMorgan, which reported an unexpected and enormous trading loss this year from the infamous "London Whale" trade. Singh no longer listed JPMorgan as a holding after owning 3.1 million shares during the first quarter.

HOUSING

Blue Mountain Capital appeared to be betting on a revival of the housing market and opened a new position in the quarter in KB Home, buying 876,165 shares of the home builder. Meanwhile, Jana bought 6.2 million shares of American Realty Capital, a real estate investment trust.

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ENERGY

Jana, led by Barry Rosenstein, exited its position in Marathon Petroleum, which had been the fund's largest stock holding at the end of the first quarter. The fund also sold all of it shares in Hess, another oil company.

Tom Steyer's Farallon Capital made a big adjustment to its holding of gas pipeline company Kinder Morgan Inc. In the first quarter it held 22.5 million shares but at the end of the second quarter it owned 4 million shares and had warrants to acquire an additional 5.2 million shares.

FOOD and AGRICULTURE

Jana opened a new position in Canadian fertilizer company Agrium, buying 6.5 million shares.

Philippe Laffont's Coatue Management was bullish on burritos and tacos in the second quarter, adding 185,000 shares of Mexican restaurant chain Chipotle, bringing its total holdings to 567,102 shares.

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FACEBOOK

The first well-known fund to disclose a significant position in Facebook in the period was Chase Coleman's Tiger Global Management with 1.96 million shares. The hedge fund was a pre-IPO investor in the social networking company.

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