A few months ago, we discussed Perry Capital's 2nd quarter 2009 Letter to Investors. Last week, while our dear friend, Jay, from Market Folly, posted their 2010 Letter to Investors. I would embed it below, but as usual Jay's blogging skills far surpass mine. Some take-aways from the letter:
- Their largest positions were in "low priced senior corporate credit in challenged industries such as auto finance and residential real estate." This is very similar to the approach of Marty Whitman's team at Third Avenue and frankly my approach as well. As the letter continues to point out, the up-side / down-side in that trade is very good when you are buying the most senior bank debt in the 60s/70s.
- Talks about the ownership of Delphi which has been written up on the DDIC (one of the highest rated ideas on the site).
- Perry has initiated a position in General Motor's bonds which we discussed late in January.
- CIT, a post I know I have promised people (I'll eventually get to it), was profitable for pretty much every hedge fund under the sun in the 4th quarter.
- The letter goes on to talk about the excessive debt situation in the corporate, commercial, and sovereign markets. I could not agree more.
- And, along with some other funds, are suing Porsche for the VOW/PAH3 arbitrage debacle.
- And it looks like they have a nice, big position, in Europe credit derivatives. Shorting sovereigns much? By the way, I love that trade - Klarman has spoken in the past how Baupost has bought protection on sovereign debt because the upside / downside is remarkable.