After Bearish 2010, Baupost Looks for Winners With Eclectic Picks (AVEO, PDLI, ALR, BBEP, ENZN, CSE, AOI, VSAT, NWSA)

In 2010, legendary Boston-based hedge fund manager Seth Klarman was a bearish voice among the bulls riding the rebound higher. Last year, Klarman noted that the government is “kicking problems down the road” with bailout plans and extended periods of low interest rates, and according to a Wall Street Journal report, K;arman’s hedge fund Baupost held 30% of its portfolio in cash in May.

Given the Baupost’s impressive track record, investors are always interested in its latest disclosed equity holdings, but those from the end of 2010 are of particular interest given the bearish outlook Klarman put forth last year.

The Baupost Group’s top-15 U.S.-listed equity holdings from the end of 2010 reveal that Klarman was, in fact, doing some buying in the last three months of the year, opening a new position in AVEO Pharmaceuticals (AVEO) and reopening a position in PDL BioPharma (PDLI), where Baupost last reported a stake in early 2009. Baupost also upped its stake in point-of-care diagnostic products firm Alere Inc (ALR).

Elsewhere during the third quarter, Baupost reduced its holdings in master limited partnership BreitBurn Energy Partners (BBEP), biotech Enzon Pharmaceuticals (ENZN), commercial lender CapitalSource (CSE), and tobacco firm Alliance One Intl (AOI).

Meanwhile, Klarman held steady in Baupost’s largest equity position, ViaSat (VSAT) and also maintained the fund’s position in long-held media giant A (NWSA).

Looking at tickerspy.com’s graph charting the performance of Baupost’s top end-of-2010 holdings so far in 2011, one can see that they are outperforming the market somewhat. If you want to see how your performance stacks up against Klarman’s or see some of Baupost’s other holdings, visit tickerspy.com to see the endowment’s top positions and a chart of their combined performance.

Pro portfolio performance is based on institutions’ top-15 holdings as disclosed in quarter-end filings with the SEC. Pro performance does not take into account additional holdings beyond the top 15 nor does it include positions that are not required to be disclosed by the SEC. As such, Pro portfolio performance should be considered an approximation and not a precise record of how an institution has performed over time.

Tags: ALR, AOI, AVEO, BBEP, CSE, ENZN, NWSA, PDLI, VSAT