Current Investments of Leading Hedge Funds

Large hedge funds that manage over $100 million in assets are obligated to file a specific form called a 13F filing every three months. This filing reflects their investment holdings at the end of the previous quarter.

Through these filings, investors can see what the top money managers around the world have bought, sold, and what they continue to hold. Although the filings can take up to 45 days after a quarter ends to be completed, they serve as the best glimpse into the investment strategies of these influential financial figures.

Here’s a closer look at what some of the world’s leading funds are currently investing in.

Berkshire Hathaway

While not a hedge fund in the classic sense, Berkshire Hathaway, founded by Warren Buffett, is an investment firm that holds stakes in various companies. With a market capitalization nearing $700 billion and more than $325 billion in cash reserves, Berkshire is a massive player in the investment world.

In its recent November filing, Berkshire disclosed a $550 million investment in Domino's Pizza (DPZ) while continuing to reduce its position in Apple Inc. (AAPL), although it still maintains a substantial 300 million shares of Apple.

Since its founding in 1965, shares of Berkshire Hathaway have generated an average annual return of 19.8%, which translates to an astonishing 3,747,646% return, as highlighted in Buffett's 2023 letter to shareholders.

Third Point

Billionaire Dan Loeb heads Third Point, which faced a challenging 2022, ending the year with a return of -21.1%, while the S&P 500 also fell by 17.7%. This downturn was largely due to Third Point's significant exposure to technology stocks, which were hard hit during that period.

However, the fund rebounded strongly in the last quarter of 2023, reflecting its long-term success. Since its launch in 1995 through the end of 2016, Third Point averaged annual gains exceeding 15%. Its startup-focused division, Third Point Ventures, achieved even better returns, providing an average annual gain of 16%, potentially turning every $10,000 invested into over $540,000 over 27 years.

Currently, the majority of Third Point's holdings are concentrated in a few key stocks, with its top five investments representing over 70% of its portfolio. The primary holding, PG&E Corp. (PCG), differs from Buffett's views as Berkshire Hathaway has rejected the idea of acquiring PG&E's parent company. Additionally, the fund's other holdings feature large, dividend-paying companies, including UnitedHealth Group Inc. (UNH), which has increased its dividend by an impressive 5,400% from $0.03 to $1.65 per share since 2010.

Appaloosa LP

Founded by billionaire David Tepper, Appaloosa LP boasts an impressive average annual return of 25% since 1993, outperforming Berkshire Hathaway's returns despite having been in operation for a significantly shorter time. If you had invested $10,000 back in 1993, it would have grown to over $7 million today.

Similar to his competitors, Tepper has invested in utility companies and compiled a portfolio with substantial dividend payers. For instance, Constellation Energy Corp. (CEG) doubled its dividend last year. Tepper also initiated a new position, acquiring $26 million worth of stock in the Walt Disney Company (DIS), which has raised its dividend by 486% since 2011. While Appaloosa holds a stake in UnitedHealth Group, it is relatively smaller at about $80 million.

The fund's concentration is evident, as its top five holdings account for more than 55% of its overall portfolio. This strategy of focusing on a select few high-confidence investments is a common practice among successful investors, allowing them to patiently await long-term gains.

As these prominent funds showcase their recent investments, regular investors can glean insights into the strategies of some of the sharpest minds in finance.

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