HIGHLIGHTS-Top U.S. hedge funds bet on Morgan Stanley and AIG

Tue Feb 16, 2016 5:13pm EST
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(Adds Third Point eBay and Yum stakes; background on AIG)

By Svea Herbst-Bayliss and Sam Forgione

NEW YORK/BOSTON Feb 16 (Reuters) - Top U.S. hedge fund management firms, including Dan Loeb's Third Point LLC, took new positions in Morgan Stanley during the fourth quarter, ahead of the bank's cost-cutting measures and bond-management reshuffling.

Third Point purchased 3 million shares, while Carlson Capital bought 2.2 million shares to own 2.3 million shares during the last three months of 2015, regulatory filings showed Friday and Tuesday.

Adage Capital added to its position, buying 1.6 million shares to own 4.5 million shares at the end of the quarter, SEC filings showed.

So far this year, Morgan Stanley shares are down more than 27 percent. In January, Morgan Stanley named Sam Kellie-Smith to head its fixed-income trading unit as it seeks to turn around the struggling business. The bank said it was cutting 25 percent of its fixed income jobs because increased regulation has made trading bonds less profitable.

These hedge-fund SEC disclosures are backward-looking and come out 45 days after the end of each quarter. Still, the filings offer a glimpse into what hedge fund managers saw as investment opportunities.

The filings do not disclose short positions, or bets that a stock will fall. As a result, the public filings do not always present a complete picture of a management firm's stock holdings.

The following are some of the hot stocks and sectors in which hedge fund managers either took new positions or exited existing stakes in the fourth quarter.   Continued...