By Brendan Conway Of DOW JONES NEWSWIRES NEW YORK -(Dow Jones)- Hedge fund billionaire and Sears Holding Corp. (SHLD) Chairman Edward Lampert's RBS Partners reported a smaller stake in Citigroup Inc. (C) and no stakes at all in Wells Fargo & Co. (WFC) and student lender SLM Corp. (SLM) as of June 30, a regulatory filing shows. The Lampert-affiliated entity also reported a smaller stake in small-business lender CIT Group Inc., with holdings falling to 3.6 million shares from 4.5 million at the end of the second quarter. Its stake in Capital One Financial Corp. (COF) fell to 7.1 million shares from 9.1 million shares. At the same time, the group's stake in insurer Genworth Financial Inc. (GNW) grew to 9.1 million shares from 8.1 million. The moves came during a quarter of significant tumult in the stock market, and it is not clear whether the adjustments were made before or after stocks' mid-April highs. Citigroup, for example, traded above $5 in mid-April but traded under $4 for much of May. It closed down a penny, or 0.3%, at $3.87 Monday. RBS Partners' Citigroup stake was 24.6 million shares as of June 30, down from 31.3 million as of March 31. RBS Partners reported holdings of 1.1 million shares of Sallie Mae as of March 31. That stake is now gone, and would have seen similar fluctuations over the course of the quarter. The stock moved from the high $13s in mid-April to the low $10s by late May. Sallie Mae gained 24 cents, or 2.1%, to $11.91 Monday. Lampert also used the quarter to execute a series of portfolio changes that tax experts called an effort to guard against potential changes to investment-partnership taxation. RBS Partners transferred ownership of more than 13 million Sears shares to Lampert's direct ownership and to limited partners of his legacy partnerships during the quarter, filings from recent months show. As of Monday's close, the shares are worth about $874 million, and comprise more than 20% of the shares previously held by RBS. A similar approach was taken to RBS Partners' sizeable holdings in AutoNation Inc. (AN) and AutoZone Inc. (AZO), with transfers of at least 15.8 million AutoNation shares, or more than 25% of its stake, and 4.8 million AutoZone shares, more than a third of the firm's stake, over the course of the quarter. All were previously disclosed in regulatory filings. The Sears, AutoNation and AutoZone moves were efforts to head off potential new levies under consideration in Congress, tax expert Robert Willens said. The bill in question is stalled in the Senate. "In the event that it passes, if and when he decides to sell the shares, the gain will be a capital gain...not ordinary income," which would greatly reduce applicable taxes, Willens said. Many investors who manage more than $100 million, including Lampert, are required to disclose most securities holdings within a month and a half of the end of a quarter. The filings give the public a relatively fresh look at the portfolios of well-known investors. -By Brendan Conway, Dow Jones Newswires; (212) 416-2670; brendan.conway@dowjones.com
