Passport Capital LLC, the $3.4 billion hedge fund founded by John Burbank, cut by more than half its bets on securities expected to fall, according to a letter to investors.
Passport’s main fund reduced its short positions to about 45 percent of assets at the end of the third quarter from about 95 percent at the start of the three-month period, the San Francisco-based firm said in the letter dated yesterday, a copy of which was obtained by Bloomberg News.
Burbank said in May he’d never been as negative on global stocks in his dozen years of running Passport. In the firm’s third-quarter letter, signed by Burbank, he cited central bank action, including pledges by German Chancellor Angela Merkel and French President Francois Hollande to protect the euro from a possible breakup, as the main reason behind the decision to reduce short positions in the fund.
Steve Bruce, a spokesman for Passport, declined to comment on the letter.
Passport got rid of various short positions in the quarter, including those in certain European securities, the firm said in the letter.
“What we’re primarily left with now are long securities in which we have bottom-up conviction,” Passport said, referring to wagers that assets will rise.
Passport Global Fund rose 11 percent this year through September in its Class A shares, according to the letter.