MSD Capital, run by Glenn Fuhrman and John Phelan, has been formed to manage Michael Dell’s wealth. Since the fund doesn’t have to worry about redemptions or short-term results, its investment portfolio is focused on long-term capital appreciation. MSD Capital isn’t a small firm either. MSD Capital invests in a variety of securities, including private investments, real estate, and placing capital with other fund managers. Its equity portfolio in publicly traded US securities was nearly $600 million at the end of December. The latest 13F filing also shows that the fund has reduced five of its six holdings.
Based on the value, the largest investment of the fund is in DineEquity Inc (NYSE:DIN). The fund holds almost 33.58% of its equity portfolio in this company, through the ownership of 2.35 million shares, worth $196.54 million. DineEquity operates two restaurant concepts: Applebee’s Neighbourhood Grill and Bar and International House of Pancakes (IHOP). The company operates 3,600 restaurants under both brands through its subsidiaries or franchises in 19 countries. It has been upgraded to ‘Buy’ by many analysts.
The second position is taken by Asbury Automotive Group, Inc. (NYSE:ABG), MSD owning 2.58 million shares, worth $138.57 million. During the fourth quarter, the holding has been reduced by approximately 200,000 shares. The company reported revenues of $5.3 billion for the full fiscal 2013, up by 15% over the previous year. The EPS of $3.53 were also up by 34% over the previous year.
The third spot goes to PVH Corp (NYSE:PVH). MSD Capital owns approximately 765,000 shares in the company, worth $104.15 million, down by approximately 30,000 shares over the quarter. PVH Corp announced a quarterly dividend of $0.0375 per share, representing a dividend yield of 0.12%.
The fund also revealed that it holds 1.31 shares of Delphi Automotive PLC (NYSE:DLPH), worth $79.03 million as per the latest 13F filing. The position has been reduced by around 235,500 shares during the fourth quarter.
WEX Inc (NYSE:WEX) is the fifth largest holding of the hedge fund, in which MSD Capital currently owns approximately 573,000 shares, with an aggregate value of $56.81 million. The fund has reduced its holding in the company by 220,000 shares in the fourth quarter. The company declared its fourth quarter and full 2013 results ten days back. Revenues for the fourth quarter rose to $182.3 million from $169 million for the same period last year, while for the full fiscal year, the revenue went up by an annual 15% to $717.5 million.
The fund also owns 760,000 shares of Sunstone Hotel Investors Inc (NYSE:SHO), worth $10.19 million, down by 341,000 shares in the last quarter.