Clifton S. Robbins’ Blue Harbour Group has revealed within a Schedule 13D filing that it owns 4.69 million shares in AGCO Corporation (NYSE:AGCO), which represent 5.3% of the company’s outstanding common shares. The hedge fund increased its overall position in the American agricultural equipment manufacturer by 853,231 shares since its most recently-submitted 13F filing.
Following activist funds like Blue Harbour Group is important because it is a very specific and focused strategy in which the investor doesn’t have to wait for catalysts to realize gains in the holding. A fund like Blue Harbour Group can simply create its own catalysts by pushing for them through negotiations with the company’s management and directors. In recent years, the average returns of activists’ hedge funds has been much higher than the returns of an average hedge fund. Furthermore, we believe do-it-yourself investors have an advantage over activist hedge fund investors because they don’t have to pay 2% of their assets and 20% of their gains every year to compensate hedge fund managers. We have found through extensive research that the top small-cap picks of hedge funds are also capable of generating high returns and built a system around this premise. In the 32 months since our small-cap strategy was launched it has returned over 142% and beaten the S&P 500 ETF (SPY) by more than 83 percentage points (read more details). Soon, we’ll be releasing a new quarterly newsletter written by former activist hedge fund analyst Michael Bland that tracks ten or so activist campaigns at any given time.
Blue Harbour Group is a Greenwich-based hedge fund firm founded by atypical activist investor, Clifton S. Robbins, in 2004. Clifton Robbins, who currently acts as the CEO of the fund, formerly worked at major private equity firms such as KKR & Co, and General Atlantic. Unlike most of his confrontational activist peers in the industry, Clifton Robbins employs a completely collaborative activist approach by working with the management teams of the companies he invests in to build and create shareholder value. The investing approach of the multi-billion dollar investment firm has been quite successful thus far, which is evidenced by its annualized returns of 8.9% since its inception. As stated by the fund’s most recent 13F filing, Clifton S. Robbins’ investment team manages a public equity portfolio worth $3.31 billion, while its top ten holdings represent 76.84% of the entire portfolio. In the meantime, Blue Harbour Group’s largest holdings include Rackspace Hosting Inc. (NYSE:RAX) and Akamai Technologies Inc. (NASDAQ:AKAM).