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Marcato Capital Boosts Stakes in Life Time Fitness and Lear Corp.

Richard McGuire’s Marcato Capital Management revealed today that it has increased its stake in two of its equity holdings. Lear Corporation (NYSE:LEA) is a $7.2 billion market cap company engaged in the business of supplying seating and electrical distribution systems and related components to virtually every major automotive manufacturer in the world.

Mick McGuire

The fund disclosed a 185% increase in its position, which had been cut by 75% over Q1, to 1.4 million shares. The fund now declared owning 4.01 million shares, which represent 4.9% of the company’s stock, and are worth about $355 million. This makes this position one of the most valuable in the fund’s portfolio, accounting for more than 10% of its total equity portfolio. In addition, Marcato Capital Management’s most valuable long equity holding is composed by 5 million call options for this company.

Another hedge fund that holds a similar position at Lear Corporation (LEA) is Harris Associates, managed by Natixis Global Asset Management, which last declared owning 4.63 million shares.

The second company in which Mr. Mcguire’s fund upped its stake is Life Time Fitness, Inc. (NYSE:LTM), a $2 billion market cap company engaged in designing, building and operating distinctive and large, multi-use sports and athletic, professional fitness, family recreation and spa centers in a resort-like environment. Marcato Capital declared a 6.4% increase in its position, to 3.115 million shares, which account for 7.6% of this company’s outstanding stock.

The fund had started this –activist– position on May 12, when it acquired almost 2.93 million shares. The current 3.115 million shares stake is worth about $150 million –the stock gained barely 1.35% since the fund’s purchase, which places this bet amongst its top 10 holdings.

In addition, to Mr. Mcguire’s fund, other major funds have been placing big bets on this company. Phill Gross and Robert Atchinson‘s Adage Capital Management last declared having initiated a stake in the company during the first quarter of the year, and currently holds 575,000 shares. Glenn J. Krevlin‘s Glenhill Advisors, also seems quite bullish about Life Time Fitness, since it almost tripled its exposure to the stock over Q1, to 436,079 shares.

Marcato Capital Management holds an equity portfolio valued at more than $2.4 billion. It usually invests in small and mid-size companies, mainly in the services and consumer goods segments.

Disclosure: Javier Hasse holds no position in any stocks mentioned

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