AEW Capital Knows Real Estate and These Are Its Top Picks

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Founded in 1981, AEW Capital Management is one of the oldest real estate-focused money management firm in the world. It is currently led by CEO Jeffrey ‘Jeff’ Furber, who also serve as the Chairman of AEW Europe. The parent company of AEW Capital Management, AEW Global, currently manages assets worth almost $55 billion and employees 600 people in 13 offices across the world.

According to AEW Capital Management’s recently-submitted 13F filing its long US equity portfolio was worth nearly $5 billion at the end of June and 93% of it included stocks from the real estate sector. The filing also revealed that during the second quarter the fund’s equity portfolio saw a modest quarterly turnover of 18.60%. In this post, we will take a look at AEW Capital Management’s top five equity holdings, which amassed 36.35% of the fund’s equity portfolio at the end of June.

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#5. Welltower Inc (NYSE:HCN)

– Shares Owned by AEW Capital Management (as of June 30): 3.88 Million

– Value of The Holding (as of June  30): $295.62 Million

AEW Capital Management inched up its stake in Welltower Inc (NYSE:HCN) by 2% during the second quarter, which helped the company to become the fund’s fifth largest equity holding at the end of June. Shares of the Ohio-based healthcare-focused REIT lost more than one-third of their value in the period between January, 2015 and February, 2016. However, they have recouped some of those losses in the past few months and are currently trading up by 8.81% year-to-date. Similar to stocks of most REITs, Welltower Inc (NYSE:HCN)’s stock has also  been beaten in the last two weeks amid fears of a rate hike from the Fed. However, analysts feel that investors are overreacting to the situation in the short-term, forgetting that Welltower has strong growth catalyst s in the form of an ageing population and its portfolio, which consists of top-notch properties, generates sufficient cash flow to more than cover the company’s debt obligations. The ownership of Welltower among funds covered by us declined marginally by one to 20 during the second quarter, though the aggregate value of their holdings in it fell by 9.7% to $630 million.

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#4. Boston Properties, Inc. (NYSE:BXP)

– Shares Owned by AEW Capital Management (as of June 30): 2.3 Million

– Value of The Holding (as of June  30): $302.27 Million

AEW Capital Management  lowered its stake in Boston Properties, Inc. (NYSE:BXP) by 2% during the second quarter. Boston Properties, Inc. (NYSE:BXP)’s stock has appreciated by 6.65% so far in 2016 and recently made its lifetime high at $144.02. The REIT currently pays a quarterly dividend of $0.65 per share, which based on its last trading price translates into an annual dividend yield of 1.90%. On August 22, analysts at Evercore ISI downgraded the stock to ‘Hold’ from ‘Buy’, but upped their price target on it to $149 from $147, which represents a potential upside of 8.6% from its current trading price. During the second quarter, the number of hedge funds covered by us that were long Boston Properties declined by three to 18 and the aggregate value of their holdings in it fell by $30 million to $446.3 million.

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