Institutional investment managers, such as Hedge Funds, are required to file a Form 13-F that discloses the hedge fund’s holding in certain securities. An institutional investment manager can include investment advisers, banks, insurance companies, broker-dealers, pension funds and corporations. The Hedge Fund industry is a very influential part of the market as assets under management have grown to roughly $2 billion according to Hedge Fund Research, Inc. The average investor can gain access to the holdings of these influential entities through Form 13-Fs and participate in the greater amount of research and diligence that goes into buying a security through a hedge fund.
Form 13-F’s can be a great source of information when you are looking for investment opportunities. However, the filing is dated and can be misleading as well. This form must be filed within 45 days following the calendar quarter end. Therefore, most investment managers will wait until the last date to file this form and make their holdings public.
There are investment managers out there that purchase securities and take a more long-term activist investment approach. For example, two investment managers that can offer profitable investment opportunities are Pershing Square Capital and Icahn Capital. Bill Ackman, founder of Pershing Square Capital, takes an activist approach to his investments and usually has a long-term and significant position in a hand full of securities. For example, Bill Ackman publicly disclosed his ownership of General Growth Properties on May 17, 2010 on a Form 13-F. General Growth Properties was trading at approximately $11.05 per share. If you purchased the shares and held to today, you would have made approximately 40% in less than one year.
From the 13-F filings, you can also see what stocks are majority owned by hedge funds. For example, Apple is currently owned by over 70 hedge funds; hedge funds are rather bullish on the stock.