Lakewood Capital Management, led by Anthony Bozza, has upped its position in Select Income REIT (NYSE:SIR). A new amended filing with the U.S. Securities and Exchange Commission revealed that Lakewood Capital owns around 3.01 million Select Income REIT (NYSE:SIR) common shares. The stake is equal to 5.0% of the class, and represents increase from 2.08 million shares the fund held previously.
Lakewood Capital was founded by Anthony Bozza in 2007. Bozza previously worked at SAB Capital Management. He has a reputation as an astute short-seller. Lakewood Capital has around $1 billion in AUM. The fund lost around 20% in 2008, gained 70% in 2009 and 16% in 2010.
According to the filing, Lakewood Capital Partners has entered into certain cash-settled total return swap agreements with Credit Suisse First Boston (CSFB). The swaps with CSFB constitute economic exposure to 86,000 notional shares. In addition, Lakewood Capital Partners has entered into certain cash-settled total return swap agreements with Morgan Stanley (MSCO). The swaps with MSCO constitute economic exposure to 858,833 notional shares.
“Lakewood Capital Partners’ swap agreements with each of CSFB and MSCO provide Lakewood Capital Partners with economic results that are comparable to the economic results of ownership but do not provide it with the power to vote or direct the voting or dispose of or direct the disposition of the shares that are the subject of the swap agreements,” the filing states.
Taking into account the subject shares, Lakewood Capital Partners has economic exposure to about 3.95 million shares, which represents about 6.6% of the outstanding shares on the same basis. Lakewood Capital “disclaim beneficial ownership of the subject shares,” according to the filing.
Select Income REIT (NYSE:SIR) is engaged in owning and investing in properties that are primarily net leased to single tenants. It has a market cap of $1.60 billion.
In September last year, Select Income REIT (NYSE:SIR) announced that its board approved a definitive merger agreement to acquire all of the outstanding common stock of Cole Corporate Income Trust (CCIT) for about $3.0 billion. Under the agreement, Select Income REIT (NYSE:SIR) agreed to acquire CCIT’s full property portfolio, which includes 64 office and industrial net lease properties as well as 23 healthcare properties.
The merger is subject to approval of the companies’ shareholders. Both companies plan to hold special meetings on January 27, 2015.
In addition, Select Income REIT (NYSE:SIR) signed another deal in October 2014 to acquire an industrial property in Memphis, Tenn., containing approximately 646,000 square feet for $14.5 million. The acquisition is subject to completion of diligence and other customary closing conditions.
Shares of Select Income REIT (NYSE:SIR) traded slightly up by 0.08% to $26.21 on Thursday. The company’s year-to-date performance stands at 7.54%. For the company’s stock, analysts have the consensus average target price of $25.38, while the consensus average recommendation is ‘Hold’. For the third quarter of 2014, the company reported net income of $23.7 million, or $0.40 per share, compared to $23.6 million, or $0.47 per share, for the same quarter of 2013.
Two Sigma Advisors, led by John Overdeck and David Siegel, holds 329,740 shares of Select Income REIT (NYSE:SIR). Another investor, Millennium Management, managed by Israel Englander, owns 184,771 shares of the company, according to our record.
Lakewood Capital focuses on Technology, Financial and Services stocks. As of the end of the third quarter of 2014, the fund’s equity portfolio value totaled around $1.6 billion. The top three holdings of the fund for the third quarter are represented by Micron Technology Inc. (NASDAQ:MU), Ingram Micro Inc. (NYSE:IM), and Citigroup Inc (NYSE:C).
During the third quarter, Lakewood Capital added more Micron Technology Inc. (NASDAQ:MU) shares, holding around 3.78 million shares of the company, which is engaged in making of advanced semiconductor systems. The hedge fund reported ownership of 4.87 million shares of Ingram Micro Inc. (NYSE:IM), which delivers a full spectrum of global technology and supply chain services to businesses around the world. Citigroup Inc (NYSE:C) was added by Lakewood Capital to its portfolio in the third quarter. The fund disclosed holding around 2.13 million shares of Citigroup Inc (NYSE:C).
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