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3 Jan 2008

Dow Jones Top Hedge Fund Trades of 2007

Dow Jones Hedge Fund Trades announced in a a press release today the annual list of the best and boldest hedge fund moves.

Among the top hedge fund trades were two deals by Atticus Management, which resulted in a collective profit of nearly $1.2 billion for the firm. All told, the "Big 10" hedge fund trades garnered profits of more than $3 billion for their respective investors.

Top Trade #1: Freeport McMoran Copper & Gold

Firm: Atticus Management

Profit: $800 million

The New York-based hedge fund hit the mother lode for the second year in the row, scoring paper gains of at least $800 million through its holding in the mining giant.

Top Trade #2: MBIA Inc., Ambac Financial

Firm: Pershing Square Capital Management

Profit: $500+ million

William Ackman's longtime gamble that bond insurance companies would run into trouble finally paid off this year as mortgage loans to high-risk borrowers started going bad and credit markets stumbled.

Top Trade #3: Foster Wheeler

Firm: Tontine Partners

Profit: $426 million

Sage investments in engineering and construction companies helped cushion the Greenwich, Conn.-based firm's losses in finance and housing.

Top Trade #4: Union Pacific, Other U.S. Railroads

Firm: Atticus Management

Profit: $387 million

A counterintuitive bet in a sector that typically slows down as an economic cycle peaks paid off handsomely for Timothy Barakett's shop. On top of paper and actual gains, Atticus made more than $20 million in dividend earnings on its railroad holdings.

Top Trade #5: First Solar

Firm: Maverick Capital

Profit: $350+ million

After a stormy 2006, Maverick rebounded in 2007 thanks to its investments in solar and alternative energy. First Solar was one of the sector's hottest performers.

Top Trade #6: Crown Castle International, American Tower

Firm: Glenview Capital Management

Profit: $319 million

Larry Robbins' New York-based hedge fund got all the right signals when it targeted the wireless towers sector. The trades crowned a successful year that saw the firm up 24%.

Top Trade #7: CF Industries

Firm: Dawson-Herman Capital Management

Profit: $160 million

Ethanol companies suffered this year, but taking a long view of the biofuels sector helped the New York-based firm cultivate a neat return from the fertilizer company.

Top Trade #8: Onyx Pharmaceuticals

Firm: Meditor Capital Management

Profit: $155 million

Having booked some profits in Onyx at the beginning of the year, the U.K.- based firm held on to the company's shares to benefit from a further jump when its cancer drug beat analysts' estimates.

Top Trade #9: Chipotle Mexican Grill

Firm: Tremblant Capital Group

Profit: $95 million

When other firms were asking for the check, Brett Barakett went back for seconds in this fast-food chain that promises healthy fare and delivered a healthy profit for the $4 billion-plus firm.

Top Trade #10: United Therapeutics Corp.

Firm: Shunway Capital Partners

Profit: $73 million

The New York-based firm gradually increased its stake in United Therapeutics during the year, gaining big-time on good news about the company's pulmonary hypertension drug.

To ensure the accuracy of this collection to top trades, Dow Jones Hedge Fund Trades only included trades that were verified directly with fund managers or through securities filings.

Blackstone and Citadel looking at stakes in Australia

The Australian Financial Review reported that US hedge funds Blackstone and Citadel have both flown teams into Australia to discuss buying a stake in troubled shopping centre owner Centro Properties Group. Australian institutions including AMP, Colonial First State and listed property group DB RREEF Trust have also expressed interest in investing in the group, the newspaper said.

Centro said yesterday it is seeking expressions of interest in the potential acquisition of the entire group or its wholesale funds in Australia and the US as it desperately tries to raise funds to refinance 2.7 billion Australian dollars in short-term debt by a February 15 deadline. Another 1.2 billion dollars is due to mature in the next 12 months.

"Some pretty big and credible players are talking about injecting equity in the business," the banker was quoted as saying.

"These aren't bottom fishers. They know that if the company can sort out the the liquidity issues, the shares will be over 3 dollars. There's an enormous amount of money to be made."

Centro shares closed 3 cents or 3 percent higher at 1.04 dollars yesterday, although it traded as high as 1.24 dollars earlier in the session.

Centro shares fell from 5.70 dollars to as low as 48 cents after it announced a 3.9 billion dollar financing shortfall, cancelled its half-year to December distribution and slashed its year to June earnings guidance last month.