Bad News: American International Group Inc (NYSE:AIG) has experienced a decrease in activity from the world’s largest hedge funds of late. Good news: Ricky Sandler, activist Barry Rosenstein, and John Armitage bet more money on American International Group (NYSE:AIG) during the quarter. Dan Loeb, Rpb Citrone, and David Tepper are some of the high profile hedge fund managers who sold out of their holdings in AIG.
According to Insider Monkey, a website specializing in hedge funds, AIG is still one of the top 5 stocks among hedge funds. Insider Monkey’s research has shown that hedge funds’ large cap stock picks outperformed the market by an average of 2 percentage points per year between 1999 and 2009. They have been forward testing the performance of top 5 stocks among hedge funds since the end of August 2012. These stocks returned 59.2% over the last 26.5 months vs. 51.5% for the S&P 500 ETF (SPY).
So, let’s take a peek at the key action surrounding American International Group Inc (NYSE:AIG).
Hedge fund activity in American International Group Inc (NYSE:AIG)
Heading into Q4, a total of 121 of the hedge funds were bullish in this stock, a change of -4% from one quarter earlier. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their stakes significantly.
According to Insider Monkey, Bruce Berkowitz’s Fairholme had the number one position in American International Group Inc (NYSE:AIG), worth close to $3.258 billion, corresponding to 44.9% of its total 13F portfolio. Sitting at the No. 2 spot is Barry Rosenstein of JANA Partners, with a $633.4 million position; the fund has 3.3% of its 13F portfolio invested in the stock. Remaining fund managers with similar optimism comprise Richard Perry’s Perry Capital and Richard S. Pzena’s Pzena Investment Management.
Due to the fact that American International Group Inc (NYSE:AIG) has faced declining sentiment from the smart money, it’s safe to say that there exists a select few funds that elected to cut their full holdings at the end of the third quarter. Interestingly, Dan Loeb’s Third Point sold off the biggest stake of the 700+ funds watched by Insider Monkey, valued at an estimated $327.5 million in stock, and Rob Citrone of Discovery Capital Management was right behind this move, as the fund cut about $121.1 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 5 funds at the end of the third quarter.