Hedge Funds’ Most-Favored REITs This Quarter

#2 Equinix Inc. (NASDAQ:EQIX)

Hedge Funds with Long Positions (as of December 31): 47

Value of Hedge Funds’ Holdings (as of December 31): $3.51 Billion

Surprisingly, the smart money sentiment towards Equinix Inc. (NASDAQ:EQIX) increased in the fourth quarter of 2015, as the number of funds with long positions in the REIT went up to 47 from 42. The money managers monitored by our team accumulated 20.30% of Equinix’s outstanding common stock at the end of 2015. Many unsophisticated investors already know that the Internet is a collection of independent networks that form a network of networks, while Equinix’s International Business Exchange (IBX) data centers represent the physical points where the interconnection between networks occurs. Just recently, the global datacenter and networking interconnect provider announced plans to open new IBX data centers in Tokyo, Dallas, Sao Paulo and Sydney as part of its expansion strategy. The REIT generated revenues of $2.73 billion during 2015, more than the $2.44 billion figure in 2014 and $2.15 billion in 2013. Shares of Equinix have advanced 36% over the past 12 months. Let’s not forget to mention that the REIT pays out an annual dividend of $7 per share, which equates with a current dividend yield of 2.28%. Stephen Mandel’s Lone Pine Capital had 2.11 million shares of Equinix Inc. (NASDAQ:EQIX) in its portfolio at the end of 2015.

#1 Northstar Realty Finance Corp (NYSE:NRF)

Hedge Funds with Long Positions (as of December 31): 48

Value of Hedge Funds’ Holdings (as of December 31): $796.16 Million

Northstar Realty Finance Corp (NYSE:NRF) is the most popular REIT among the hedge funds tracked by Insider Monkey as of the end of 2015. Nonetheless, the popularity of the REIT declined significantly during the December quarter, with the number of funds invested in Northstar Realty Finance slid to 48 from 59 quarter-over-quarter. Northstar Realty Finance is a diversified commercial real estate company whose portfolio primarily includes healthcare, hotel, manufactured housing communities, net lease and multifamily properties. Earlier this year, Land and Buildings, an activist firm, issued a letter to NorthStar Asset Management Group Inc. (NASDAQ:NSAM), urging the external manager and advisor of NRF to explore strategic alternatives to maximize shareholder value. One of those alternatives includes the recombination of NSAM with NRF. Northstar Realty Finance has seen its shares decline 21% since the beginning of 2016. Lee Ainslie’s Maverick Capital owns nearly 3.66 million shares of Northstar Realty Finance Corp (NYSE:NRF) as of December 31.

Disclosure: None