John A. Levin & Co.'s Levco Debt Opportunity Fund was up 151 basis points in September, partly on the back of its position in a U.K. merchant coal power plant. AES Drax received an unsolicited bid from Perry Capital and Constellation Energy. "That bid caused both our AES Drax and Eggborough (another U.K. coal plant) positions to trade higher," says an investor letter.
September was a rough month for the auto sector as signs of Delphi Corp.'s bankruptcy were looming. The auto supplier eventually filed for bankruptcy protection in October. The fund's auto positions broke even during the month, the letter says. John Levin had a long position in GMAC, a long/short play for Delphi, a long bet on Dura Automotive Systems, and shorts for ArvinMeritor and Lear Corporation.
The fund is up 8.25% for the year through September, yet the firm has opted to liquidate it (AIN, 11/7) and other event-driven funds after Levin was unable to reach an agreement with the teams managing the funds. Stuart Kovensky, portfolio manager, was out of the office and did not return a call by press time.