The New Jersey-based hedge fund Appaloosa Management run by David Tepper has performed admirably on the backdrop of volatile market conditions this year. Institutional Investor’s Alpha reports that the distressed credit manager is up 25 percent for the year before fees – outperforming the S&P 500 by close to 900 basis points in the same period. The former Goldman Sachs trader currently manages around US$12 billion in assets with around US$4 billion of that pool invested in US equities as of the latest quarter.
In the third quarter, Appaloosa initiated six new positions in stocks and one in ETFs. Amongst the largest are 8.25 million shares of AIG [AIG] for US$271 million, 2.4 million shares of JP Morgan [JPM] for US$97 million and 2 million shares of Sealed Air Corp [SEE] for US$31 million. Here is a chart of how they are doing against the S&P 500:
Furthermore, the hedge fund also bought an additional 928,525 shares in Citigroup [C] to take its total stake in the company to 10,194,547 shares. It also boosted its stake in The Hartford Financial Services Group [HIG], by 2,539,694 shares to a total of 3,612,650 shares; and General Motors [GM] by 1,239,084 shares to a total of 5,952,400 shares. Here is a chart of how they are doing against the S&P 500:In contrast, David Tepper cut his stake in Valero Energy Corp [VLO] by two thirds — selling 1,464,444 shares in the third quarter with 842,717 shares remaining in the independent petroleum refining and marketing company. The hedge fund also eliminated its entire stake in Nuance Communications [NUAN], and the Royal Bank of Scotland [RBS]. Here is a list of the top ten positions Appaloosa Management holds as of the latest quarter, sorted by market value: