MKP Capital Management Q3 vs Q4 13F Holdings: Winners, Losers, and Surprises

MKP Capital Management is an American investment firm that manages hedge funds and alternative investments in equity, derivatives, and fixed income. Every quarter, the U.S Securities and Exchange Commission (SEC) requires institutional investment managers like MKP Capital Management to disclose their fund holdings to the public using the Form 13F. In this article, we'll compare MKP's third and fourth-quarter 13F holdings and look at the companies MKP added to its portfolio, sold, and held onto.

In Q3, MKP Capital Management held approximately $167 million in assets under management (AUM), down from $168 million in Q2. However, in Q4 2022, they saw a considerable increase in AUM, now managing roughly $297 million in assets. This shows that the firm added $129 million worth of assets in Q4, or about a 77% increase, compared to Q3. Below are some highlights of the notable changes in holdings.

Winners

One of the largest holdings that MKP added to its portfolio is Select Sector SPDR Trust (XLF), which saw an increase of 76.6% from 5 million shares in Q3 to 8.8 million shares in Q4. Another notable addition is iShares MSCI Emerging Markets ETF (EEM), where MKP bought 5.5 million shares.

Losers

MKP Capital Management substantially reduced its holdings in iShares MSCI ACWI ETF (ACWI). The firm sold approximately one quarter (25%) of their shares, reducing their total holdings from 2 million shares in Q3 to 1.5 million shares in Q4. AGNC Investment Corp (AGNC) and Generac Holdings Inc (GNRC) also failed to make their way into MKP's Q4 portfolio.

Surprises

MKP Capital Management sold all of its shares in Microsoft Corporation (MSFT) in Q4, where the company owned about 79,000 shares in Q3. This, however, was not the only shocker. MKP had put options on Opendoor Technologies Inc (OPEN) with a value of over $1,300, but the options were sold at a 62.7% loss, totaling a value of $503. The company also had put options on other companies such as Ares Commercial Real Estate Corporation (ACRE), Starwood Property Trust Inc (STWD), and Ladder Capital Corp (LADR).

Final Thoughts

Overall, MKP Capital Management's Q4 13F holdings show that the company has been focusing on ETFs and shifting away from individual company stocks. The addition of XLF and EEM to their portfolio is further evidence of the company's strategy to tap into a diverse range of stocks. As we head into 2023, it'll be interesting to see how the firm navigates any market uncertainties while tweaking their portfolio accordingly.