According to a Schedule 13D form filed on 23rd March with the SEC, Richard Blum‘s Blum Capital Partner has further trimmed its activist stake in Career Education Corp. (NASDAQ:CECO). The fund now owns about 4.75 million shares as compared to 5.52 million shares that it disclosed in February. The current stake represents 7% of the company’s outstanding common stock.
With the latest filing, Blum trimmed its stake in Career Education Corp. (NASDAQ:CECO) for the third time this year. In January the fund shed some 780,000 shares and another 844,800 shares in February. Among over 700 hedge funds that we track, interest in the company increased during the fourth quarter as 15 funds disclosed holding $91.16 million worth of the company’s stock, as compared to 12 funds with $66.16 million in the previous quarter. Eric Semler’s TCS Capital Management is another significant stakeholder with 2.68 million shares valued at $18.64 million as of the end of last year.
Richard Blum had an extensive experience in finance before he founded Blum Capital in 1975. Prior to launching his own firm, Mr. Blum had worked at Sutro & Co. for 17 years. The fund focuses on small and middle cap companies, and is also engaged in providing capital for various transactions such as share repurchases, acquisitions and divestitures, and privatizations. Besides its own account, the fund’s clients include wealthy families, corporations, and university and philanthropic endowment funds. As of the end of December, market value of the fund’s equity portfolio stood at $578.01 million. Blum Capital is also characterized by its much smaller number of holdings, 5 as of the end of fourth quarter, as compared to most hedge funds. The firm’s top two holdings were CBRE Group Inc (NYSE:CBG) and Avid Technology, Inc. (NASDAQ:AVID). The finance sector accounted for 69% of the fund’s holdings.
Blum Capital’s focus on small- and mid-cap space falls in line with the strategy that we have developed at Insider Monkey. Our research has revealed that a strategy based on most popular small-cap companies can beat the market by around 1.0 percentage point per month. Our small cap strategy, the stock picks of which we have been sharing in our newsletters since 2012, is based on 15 most popular small cap picks among several hundred hedge funds. The strategy beat the S&P 500 ETF (SPY) by staggering 79.4 percentage points since August 2012 through March 2015 and returned 132% during that period.
CBRE Group Inc (NYSE:CBG) represents Blum Capital’s top holding with 11.71 million shares valued at $401.09 million during the fourth quarter. The stake constituted 69.39% of the fund’s portfolio value. The stock has appreciated by nearly 38% over the last 52 weeks. The $12.12 billion commercial real estate services and investment firm has recently been reported to negotiate the purchase of a division of Johnson Controls Inc (NYSE:JCI) that manages 1.8 billion square feet of corporate retail space. The price tag is estimated to be somewhere between $600 million and $1.5 billion.
Towards the end of 2014, 30 funds had an aggregate investment of $2.03 billion in CBRE Group Inc (NYSE:CBG). Among these, five firms are managed by billionaires, which hold $180.99 million worth of stock. One of these funds is D.E Shaw’s DE Shaw, which owns some 2.78 million shares valued at $95.09 million, according to its latest 13F filing.
The stake in Avid Technology, Inc. (NASDAQ:AVID) represents 17.52% of Blum Capital’s portfolio value and is the fund’s second largest holding. The fund initiated a stake in the company during the fourth quarter and disclosed holding 7.13 million shares worth $101.27 million in its latest 13F filing. Avid Technology provides technology products, solutions and services that enable the creation and monetization of audio and video content. The company is up by a staggering 145% over the last year. In comparison, the computer peripherals industry has only appreciated by about 22.8% over the same time period.
