Richard Chilton‘s Chilton Investment Company, LLC is a hedge fund founded in 1992 by former Alliance Capital, Merrill Lynch, and Allen & Company employee, Richard Lockwood Chilton Jr. Launched as a long-short fund, the fund has evolved to employ aggressive capital appreciation strategies in its investments, which include both public equity and fixed income markets. In 2011 the fund had $7.5 billion in assets under management, though this has since shrunk to around $3 billion. As of the end of 2014, the fund disclosed an equity portfolio valued at $2.87 billion that contains over 170 positions, mainly represented by Services Stocks. According to the latest 13F filing, Chilton’s top picks include W.R. Grace & Co. (NYSE:GRA), Sherwin-Williams Co. (NYSE:SHW), Union Pacific Corporation (NYSE:UNP), Covidien plc (NYSE:COV) and Actavis plc (NYSE:ACT).
We track hedge funds and billionaire investors because our research has shown that a portfolio that consists of the most popular small-cap stocks among these investors outperformed the S&P 500 Total Return Index by almost one percentage point per month between 1999 and 2012 in our backtests, while their 50 top picks (mostly represented by large-cap companies), underperformed the Index by around 7 basis points. We have been sharing the list of the 15 most popular small-cap stocks among hedge funds in real time since the end of August 2012. This strategy has returned around 132% since then, in comparison to a gain of only 57% for the S&P 500 ETF (SPY) during the same period (read the details here).
According to the fund’s latest 13F filing, Chilton decreased its position in the chemical specialty company W.R. Grace & Co. (NYSE:GRA) by 9% on the quarter, but the position remains the fund’s largest, constituting 6.20% of its equity portfolio. The investor owns 1.87 million shares of the company, valued at $177.95 million. Moreover, W.R. Grace’s popularity among hedge funds is something that is worth noticing, because in the latest round of 13F filings, a total of 42 investors reported holding around $3.14 billion worth of W.R. Grace & Co. (NYSE:GRA)’s stock (more than 40% of the company’s shares). At the end of December last year, Iridian Asset Management held 5.35 million shares of the company, followed by billionaires John Griffin and Stephen Mandel, as W.R. Grace & Co. (NYSE:GRA)’s three largest shareholders among the funds that we track.