Glenview Capital Partners was up 1.6% in September while having some of its most cautious positioning ever over the lifetime of the fund, with a historically low net exposure. Where the manger does see great value is in some event driven and arbitrage situations, for now an unpopular segment of the market due to several deals collapsing due to anti-trust claims and stricter laws and enforcements on “inversions”.
The fund ended the month of September with a 35% net long equity book composed of a 127.5% long book and a 92.38% short book. In Credit the fund carries only a handful of longs (6.5%) while it carries a 22.3% short book. Glenview has a history in building up credit exposure after large dislocations as those are the times that credit can offer the high return thresholds Larry Robbins is looking for. The net short position illustrates the manager’s current viewpoint that credit markets at large are overvalued and that we are likely to see a dislocation at some point.
Glenview has an event-laden equity portfolio with large positions in Monsanto, Computer Sciences Corp, Aetna, Cigna, Humana and Anthem. Robbins believes there is a lot of value in event driven names since several deals fell apart due to anti-trust claims and stricter laws and enforcements on “inversions”. The market has been pricing pending deals as if we are in “arbageddon” in Robbins’ words. As a result he has been adding to some of the existing situations as well as initiating new ones, one of which is the Williams Company, one of the fund’s best performers in September.