Icahn, Soros Buy Herbalife; Paulson, Others Dump Gold

Aug 15 2013 | 2:50pm ET

Pershing Square Capital Management's antagonists in the battle over Herbalife boosted their holdings in the nutritional supplements company in the second quarter.

Both Carl Icahn and Soros Fund Management added to their Herbalife stakes, according to their 13-F filings. Soros bought a 4.9% stake in the company during the quarter—making Herbalife its third-largest stock holding—while Icahn increased his holdings by about 4% and now owns 16.5% of Herbalife, making him its largest shareholder.

Icahn and Soros weren't alone among hedge funds in buying Herbalife in the second quarter: Brookside Capital Management and D.E. Shaw & Co. also invested in the company, while Tiger Consumer Management cut its stake. Pershing Square has a $1 billion short bet against the company.

Soros is also taking on Pershing Square over J.C. Penney Co. The family office bought a 9.1% stake in the retailer, in which Pershing Square is the largest shareholder. But while Pershing Square chief William Ackman is agitating for change at the company, Soros is backing interim CEO Myron Ullman.

Soros also doubled its stake in Apple, while dumping its stake in US Airways. The firm also sold $183 million in gold exchange-traded funds, eliminating its position in one.

Soros wasn't alone in doing so. Paulson & Co., arguably the most prominent gold bull among hedge funds, dumped more than half of its investment in the SPDR Gold Trust, worth some $1.5 billion. Paulson said it sold the shares "due to a reduced need for hedging," and also sold buy options for Barrick Gold Corp. Third Point also sold SPDR Gold shares, and Greenlight Capital eliminated its Barrick stake.

Third Point, which is pushing Sony Corp. to boost profits at its entertainment unit, bought into another Hollywood powerhouse in the second quarter, taking a 1.8 million share stake in Walt Disney Co. The hedge fund also bought a $120 million stake in pharmaceutical company Elan Corp., which last month agreed to be acquired by Perrigo Co.

For its part, Pershing Square exited its investment in Mondelez International and reduced its stake in Procter & Gamble, General Growth Properties and Matson Inc.


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