A market correction in the third quarter, spurred by a number of global macroeconomic concerns ended up having a negative impact on the markets and many hedge funds as a result. The stocks of smaller companies were especially hard hit during this time as investors fled to investments seen as being safer. This is evident in the fact that the Russell 2000 ETF underperformed the S&P 500 ETF by 14 percentage points between June 25 and the end of October. We also received indications that hedge funds were trimming their positions amid the market volatility and uncertainty, and given their greater inclination towards smaller cap stocks than other investors, it follows that a stronger sell-off occurred in those stocks. Let’s study the hedge fund sentiment to see how those concerns affected their ownership of SEI Investments Company (NASDAQ:SEIC) during the quarter.
SEI Investments Company (NASDAQ:SEIC) was in 27 hedge funds’ portfolios at the end of the third quarter of 2015. SEI Investments Company (NASDAQ:SEIC) shareholders have witnessed an increase in hedge fund interest of late. There were 20 hedge funds in our database with SEI Investments Company (NASDAQ:SEIC) positions at the end of the previous quarter. At the end of this article, we will also compare SEI Investments Company (NASDAQ:SEIC) to other stocks including Coach, Inc. (NYSE:COH), ANSYS, Inc. (NASDAQ:ANSS), and IHS Inc. (NYSE:IHS) to get a better sense of its popularity.
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According to most traders, hedge funds are perceived as unimportant, old investment vehicles of years past. While there are greater than 8000 funds trading at present, our experts choose to focus on the elite of this group, about 700 funds. Most estimates calculate that this group of people administer the lion’s share of the hedge fund industry’s total asset base, and by tailing their first-class equity investments, Insider Monkey has come up with numerous investment strategies that have historically beaten Mr. Market. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points annually for a decade in their back tests.
Keeping this in mind, we’re going to take a gander at the fresh action surrounding SEI Investments Company (NASDAQ:SEIC).
Hedge fund activity in SEI Investments Company (NASDAQ:SEIC)
Heading into Q4, a total of 27 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 35% from the previous quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s database, Ken Griffin’s Citadel Investment Group had the most valuable position in SEI Investments Company (NASDAQ:SEIC), worth close to $121.5 million, comprising 0.1% of its total 13F portfolio. The second largest stake is held by Royce & Associates, mutual fund led by Chuck Royce, holding a $70.6 million position; the fund has 0.4% of its 13F portfolio invested in the stock. The remaining members of the smart money that are bullish contain Anand Parekh’s Alyeska Investment Group, Cliff Asness’ AQR Capital Management and Richard Chilton’s Chilton Investment Company.
As industry-wide interest jumped, some big names were leading the bulls’ herd. D E Shaw assembled the largest position in SEI Investments Company (NASDAQ:SEIC). D E Shaw had $4.5 million invested in the company at the end of the quarter. Peter Muller’s PDT Partners also initiated a $2 million position during the quarter. The other funds with brand new SEIC positions are George Hall’s Clinton Group, Ray Dalio’s Bridgewater Associates, and Jacob Gottlieb’s Visium Asset Management.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as SEI Investments Company (NASDAQ:SEIC) but similarly valued. These stocks are Coach, Inc. (NYSE:COH), ANSYS, Inc. (NASDAQ:ANSS), IHS Inc. (NYSE:IHS), and Polaris Industries Inc. (NYSE:PII). All of these stocks’ market caps match SEI Investments Company (NASDAQ:SEIC)’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $533 million. Coach, Inc. (NYSE:COH) is the most popular stock in this table. In SEI Investments Company, the funds from our database amassed stakes worth $486 million in aggregate at the end of September. However, it was not the most popular stock in the group, even though the smart money interest is above average. On the other hand, the stock registered an increase in the number of bullish investors in the third quarter, as compared to COH, which saw this number fall by eight funds.