One huge winner in the Heinz-Kraft merger is a Boston hedge fund run by former Harvard Endowment analysts
(Flickr/ Cavale Doom)A Boston-based hedge fund called Adage Capital is a big winner in the Heinz-Kraft mega merger, making $50 million overnight.
On Wednesday morning, Warren Buffett's Berkshire Hathaway and the Brazilian private-equity firm 3G Capital said H.J. Heinz would merge with the publicly traded Kraft Foods to form the third-largest food and beverage company in North America.
Shares of Kraft ripped on Wednesday. The food company's stock was most recently trading up about up $19.68, or 32.1%, to about $81.01 per share.
Adage Capital Management, founded by former Harvard Endowment equity analysts Phill Gross and Robert Atchinson in 2001, is the largest hedge fund shareholder of Kraft. (We wrote about Adage Capital last summer when the fund made close to $1 billion on one biotech stock.)
Adage Capital held 2,565,335 shares of Kraft at the end of the fourth quarter, according to the latest available data compiled by Bloomberg.
The fund had sold 535,700 shares of its Kraft stake in the fourth quarter, ending December 31, the data shows. The position also makes up only 0.4% of the fund's portfolio. (Adage could have traded in or out of the position since that time. Funds need only disclose their long equity holdings 45 days after the end of each quarter.)
Regardless, the stock has been a winner for Adage.
Wednesday morning alone, Adage's stake increased by about $50.4 million. The fund's overall stake now has a market value of $208.04 million, according to our calculations.
Adage has been an investor in Kraft for many years, according to securities filings.
In September 2012, Mondelez International, formerly Kraft Foods, spun off Kraft Foods Group, and the company began trading under the ticker symbol KRFT. Adage has continued to be a shareholder. Since that time, shares of Kraft shares are up more than 78%.
Here's a chart:
(Google Finance )
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