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Top Investor Can’t Stop Buying Shares of This REIT; Should You Follow Him?

A recently-amended 13D filed with the U.S. Securities and Exchange Commission disclosed that Keith Meister’s Corvex Management LP holds 80.61 million shares of VEREIT Inc. (NYSE:VER), which account for 8.9% of the Real Estate Investment Trust’s outstanding common stock. The public filing also disclosed that the investment firm acquired 7.76 million shares over the past 60 days at prices ranging from $7.90 to $8.68. Moreover, Corvex Management has amassed 9.96 million shares of the REIT since the previous 13D filed with the SEC on March 9, 2015.

Keith Meister

Corvex Management LP is an activist hedge fund established by Keith Meister back in 2010, with $1 billion in financial support from reputable investor George Soros. Meister, a former protégé of Carl Icahn, has managed to grow his investment firm quite rapidly, amassing over $8 billion in assets under management. The New York-based investment firm takes on an opportunistic and event-driven approach to investing, and also seeks for opportunities in special situations and distressed securities. According to its most recent 13F filing, Corvex Management LP oversees an equity portfolio with a market value of $9.14 billion.

Professional investors like Keith Meister spend considerable time and money conducting due diligence on each company they invest in, which makes them the perfect investors to emulate. However, we also know that the returns of hedge funds on the whole have not been good for several years, underperforming the market. We analyzed the historical stock picks of these investors and our research revealed that the small-cap picks of these funds performed far better than their large-cap picks, which is where most of their money is invested and why their performances as a whole have been poor. 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? A portfolio consisting of the 15 most popular small-cap stock picks among the funds we track has returned more than 118% and beaten the market by more than 60 percentage points since the end of August 2012 (see more details).

Keith Meister
Keith Meister
Corvex Capital

Let’s now turn our full attention to VEREIT Inc. (NYSE:VER), a publicly owned REIT, which owns and manages a well-diversified portfolio of assets, including retail, restaurant, office, and industrial real estate. Prior to proceeding to a more in-depth analysis on the company’s operations, opportunities and risks, let’s take a quick look at its major shareholders. Aside from Corvex Managemen, Larry Robbins’ Glenview Capital and Matthew Halbower’s Pentwater Capital Management are two other major shareholders of VEREIT from our database. The former holds 18.63 million shares, while the latter owns a 12.40 million share-stake as of June 30.

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