Some of the biggest names in the hedge-fund industry may have gotten whacked by betting on PG&E at exactly the wrong time

  • Pacific Gas and Electric Company, California’s biggest utility provider, has seen its value plunge by 80% after last November’s deadly California wildfire.
  • The utility on Monday said it intends to file bankruptcy petitions at the end of the month to reorganise under Chapter 11.
  • Eight hedge funds snapped up shares in the third quarter – before the wildfire broke out.
  • Including Monday’s loss, those eight firms would have lost $US1.8 billion over the past three months if they held on to their positions, according to Markets Insider’s calculations.

Pacific Gas and Electric Company (PG&E), California’s biggest utility provider, has seen its value plunge after last November’s wildfire, the deadliest and most destructive in California history. And eight hedge funds, which loaded up on PG&E shares in the third quarter, could be have lost billions as a result.

The past three months have been a tough time for PG&E:

With shares sliding 80% since November, PG&E has become a toxic investment for its shareholders. Markets Insider looked at the nine hedge funds with the largest holdings in the utility. Of those, only DE Shaw sold shares in the third quarter. The rest added to their holdings.

By Markets Insider’s calculation, if these eight firms held their entire positions through Monday, they could have lost $US1.8 billion over the past three months.

The firms could have sold their shares before the fire, or in the immediate aftermath, avoiding some of the decline. And they could have hedged their positions, offsetting any losses.

Below are eight hedge funds that loaded up on PG&E at exactly the wrong time, in ascending order of their positions since their last disclosure.


Millennium Management

Position: 2,381,220 shares

Per cent of PG&E outstanding: 0.46%

Position change in the third quarter: +1,494,725

Potential loss: $US86.4 million

Millennium Management declined to comment on its investment in PG&E.

Source: Bloomberg


Citadel Advisors

Position: 2,864,617 shares

Per cent of PG&E outstanding: 0.55%

Position change in the third quarter: +915,781

Potential loss: $US104 million

Citadel did not immediately respond to request for comment.

Source: Bloomberg


Appaloosa Management

Position: 3,991,033 shares

Per cent of PG&E outstanding: 0.77%

Position change in the third quarter: +2,197,066

Potential loss: $US144.9 million

Appaloosa did not immediately respond to request for comment.

Source: Bloomberg


BlueMountain Capital Management

BlueMountain website

Position: 4,307,967 shares

Per cent of PG&E outstanding: 0.83%

Position change in the third quarter: +4,142,068

Potential loss: $US156.4 million

BlueMountain did not immediately respond to request for comment.

Source: Bloomberg


Southpoint Capital Advisors

Scott Olson/Getty Images

Position: 5,092,600 shares

Per cent of PG&E outstanding: 0.98%

Position change in the third quarter: +92,600

Potential loss: $US184.9 million

Source: Bloomberg


Viking Global Investors

Photo by Scott Olson/Getty ImagesViking cofounder Andreas Halvorsen

Position: 5,728,092 shares

Per cent of PG&E outstanding: 1.1%

Position change in the third quarter: +5,728,092

Potential loss: $US207.9 million

Source: Bloomberg


Hound Partners

Drew Angerer/Getty Images

Position: 6,674,343 shares

Per cent of PG&E outstanding: 1.3%

Position change in the third quarter: +6,674,343

Potential loss: $US242.3 million

Source: Bloomberg


Baupost Group

Getty Images/ Kevork DjansezianBaupost founder Seth Klarman

Position: 18,979,790 shares

Per cent of PG&E outstanding: 3.66%

Position change in the third quarter:+14,479,790

Potential loss: $US689 million

Baupost declined to comment on its investment in PG&E when Markets Insider reached out last week.

Source: Bloomberg


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