BlueCrest Capital Management is among Europe’s biggest hedge funds, with $14 billion in assets under management as of January 1, 2015. The Guernsey-based investment firm was established by William Reeves and Michael Platt in 2000. BlueCrest Capital employs a multi-strategy investing approach across the fixed income and public equity markets in the United States and United Kingdom. The two founders had worked as Managing Directors and senior proprietary traders at JP Morgan prior to establishing their own firm. By closely analyzing the latest 13F filing submitted by BlueCrest, we identified three bullish moves made by the firm during the second quarter. The three stocks that have received investor confidence from BlueCrest Capital are represented by Simon Property Group Inc. (NYSE:SPG), Facebook Inc. (NASDAQ:FB), and Herbalife Ltd. (NYSE:HLF).
Why are we interested in the 13F filings of a select group of hedge funds? We use these filings to determine the top 15 small-cap stocks held by these elite funds based on 16 years of research that showed their top small-cap picks are much more profitable than both their large-cap stocks and the broader market as a whole; yet investors have been stuck (until now) investing in all of a hedge fund’s stocks: the good, the bad, and the ugly. Why pay fees to invest in both the best and worst ideas of a particular hedge fund when you can simply mimic the best ideas of the best fund managers on your own? These top small-cap stocks beat the S&P 500 Total Return Index by an average of nearly one percentage point per month in our backtests, which were conducted over the period of 1999 to 2012. Even better, since the beginning of forward testing at the end of August 2012, the strategy worked just as our research predicted and then some, outperforming the market every year and returning 118% over the last 35 months, which is more than 60 percentage points higher than the returns of the S&P 500 ETF (SPY) (see more details).
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BlueCrest Capital acquired a 95,000-share stake in Simon Property Group Inc. (NYSE:SPG) during the quarter, which is valued at $16.44 million as of the end of June. Simon Property Group Inc., the largest U.S. real estate investment trust (REIT), recently announced that its majority-owned operating partnership subsidiary, Simon Property Group, issued senior notes with a principal amount of $1.1 billion that have a weighted average coupon rate of 3.05%. The REIT is using a part of the proceeds to refinance its existing debt; the net proceeds will be used to fund the redemption of $366.6 million outstanding of the company’s 5.75% note due 2015. The ups-and-downs of the stock this year might have been frustrating for some of its investors, but the stock has still delivered a gain of over 5% year-to-date. In the meantime, Simon Property Group Inc. (NYSE:SPG) is the top REIT of Jeffrey Furber’s AEW Capital Management for the current period. The real estate investment manager owns 2.97 million shares of the REIT, which are valued at $513.89 million.
Moving on to the second bullish move of BlueCrest Capital, the fund augmented its position in Facebook Inc. (NASDAQ:FB) by 109,901 shares during the second trimester, ending the quarter with 187,802 shares valued at $16.11 million. Interestingly, the shares of the social networking company are down by 4.98% in today’s pre-market trading session, but have still returned 16% since the beginning of the year. Some analysts are inclined to believe that the shares of Facebook are overvalued at the moment, while others claim that there is more upside for the stock as the company’s revenue growth represents the major factor that pushes the stock higher. In its most recent financial results, Facebook posted revenue growth of 48% year-over-year, which clearly shows that the company is on the right track. However, the Facebook “skepticists” suggest that most investors have been overlooking the company’s decelerating revenue growth, though realistically that should not raise any red flags as it is almost impossible to deliver growth of over 50% endlessly. Stephen Mandel’s Lone Pine Capital and Philippe Laffont’s Coatue Management are the top equity holders of Facebook Inc. (NASDAQ:FB) within our database, holding stakes of 9.76 million shares and 8.73 million shares, respectively.
The last bullish move discussed in this article was made on Herbalife Ltd. (NYSE:HLF)’s stock, which has gained nearly 53% year-to-date. BlueCrest Capital acquired 245,815 shares of Herbalife, adding them to a holding that now consists of 266,531 shares valued at $14.68 million. The global nutrition company recently released its financial results for the second quarter and raised its full year guidance. Herbalife posted adjusted earnings per share (EPS) of $1.24 per diluted share, beating its previously-disclosed guidance of $1.05 -$1.15. Meanwhile, the company’s net sales amounted to $1.2 billion, down by 11% year-over-year, primarily owning to the strong U.S. dollar. However, the local currency net sales grew by 1% year-over-year, which indicates that there is still demand for its products on the global markets. It’s worth mentioning that Herbalife expects its currency adjusted EPS for the next quarter to be in the range of $1.40 to $1.50. Icahn Capital, founded by reputable investor Carl Icahn, owns by far the largest stake in Herbalife Ltd. (NYSE:HLF) among the hedge funds we track, reporting ownership of 17 million shares as of June 30.
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