Ken Griffin‘s (pictured) Citadel Investment Group has acquired about 1.09 million shares of 8Point3 Energy Partners LP (NASDAQ:CAFD). The holding represents about 5.4% of the $400 million utilities company that launched its IPO last week. Another company that recently launched its IPO and already has a significant hedge fund backer is Nivalis Therapeutics Inc (NASDAQ:NVLS). James E. Flynn‘s Deerfield Management disclosed owning about 3.73 million shares of the $219 million healthcare company through the firm’s affiliated funds, according to a recent 13D form filed with the Securities and Exchange Commission. The holding represents about 25.52% of the company’s outstanding shares.
Ken Griffin launched his renowned managed futures fund, Citadel Investment Group in 1990 with $4.2 billion in assets under management. Currently the fund holds about $176 billion worth of regulatory assets under management and has 979 employees. The market value of its public equity portfolio stood at $104.72 billion at the end of March, with the finance sector amassing 25% of the fund’s holdings. On the other hand, Deerfield’s public portfolio value stood at $3.09 billion at the end of the first quarter, with the healthcare sector representing 94% of its holdings.
Let’s first take a step back and analyze how tracking hedge funds can help an everyday investor. Through our research we discovered that a portfolio of the 15 most popular small-cap picks of hedge funds beat the S&P 500 Total Return Index by nearly a percentage point per month on average between 1999 and 2012. On the other hand the most popular large-cap picks of hedge funds underperformed the same index by seven basis points per month during the same period. This is likely a surprise to many investors, who think of small-caps as risky, unpredictable stocks and put more faith (and money) in large-cap stocks. In forward tests since August 2012 these top small-cap stocks beat the market by an impressive 85 percentage points, returning over 145% (read the details here). Follow the smart money into only their best investment ideas, all while avoiding their high fees.
With two sponsors, namely First Solar, Inc. (NASDAQ:FSLR) and SunPower Corporation (NASDAQ:SPWR), 8Point3 Energy Partners LP (NASDAQ:CAFD) is a yieldco offering a dividend yield of 4.27%. The proceeds from the offering will be used to pay for the assets from the sponsors that can generate a stable stream of earnings, as well as any acquisitions that may materialize in the future. The move to form this yieldco was intended to shield the investors from the manufacturing risks associated with the solar industry.