London-Based Cryder Capital Loads Up On Top Picks; Sells Off BlackRock

Cryder Capital Partners LLP is a London-based asset manager that has been running since around October 2011. Ferdinand Groos, who previously served as a Managing Director at private equity firm Rhone Capital LLC, currently runs Cryder Capital Partners as Managing Partner.

The British investment firm recently disclosed its equity positions through its 13F filing for the June quarter, so Insider Monkey decided to reveal the firm’s major moves completed during the quarter and its top picks ahead of the third quarter. Cryder Capital’s equity portfolio was valued at $124.64 million on June 30, down from $130.67 million recorded at the end of the first quarter. Of the 11 positions in its portfolio at the end of the March quarter, Cryder Capital boosted nine of them during the second quarter, and sold out of one entirely, that being its stake in BlackRock Inc. (NYSE:BLK). With that in mind, let’s take a look at Cryder Capital’s top picks ahead of the current quarter, as well as its decision to jettison its BlackRock position.

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London-Based Asset Manager Sells Off BlackRock Stake

Cryder Capital Partners LLP sold off its 47,288-share stake in BlackRock Inc. (NYSE:BLK) during the second quarter of 2016, one of the firm’s largest holdings at the end of the March quarter. In fact, the BlackRock position was the fourth-largest position in Cryder Capital’s portfolio at the end of March, accounting for 12.3% of that portfolio. The biggest U.S money manager by assets has seen its market value jump by 5% since the beginning of 2016. BlackRock, which offers around 340 iShares exchange-traded funds, recently revealed plans to close ten of its infrequently traded ETFs as part of an “ongoing process to review its product lineup and ensure it meets the evolving needs of its clients.” The company’s total revenue for the first three months of 2016 fell to $2.62 billion from $2.72 billion, mainly because of a decline in base fees and performance fees. Adage Capital Management, run by Phillip Gross and Robert Atchinson, was the owner of 204,080 shares of BlackRock Inc. (NYSE:BLK) at the end of March.

#4. Westinghouse Air Brake Technologies Corp (NYSE:WAB)

 – Shares Owned by Cryder Capital (as of June 30): 219,165

 – Value of Cryder Capital’s Holding (as of June 30): $15.39 Million

The London-based asset manager trimmed its exposure to Westinghouse Air Brake Technologies Corp (NYSE:WAB) by 6,839 shares during the second quarter, ending the period with 219,165 shares. The trimmed position was valued at $15.39 million on June 30 and accounted for 12.4% of the firm’s portfolio. This was the only position trimmed by Cryder Capital during the June quarter, save for the BlackRock stake. In late July 2015, the provider of products and services for the global rail industry announced its plans to acquire French peer Faiveley Transport. In May, the European Commission revealed concerns that the deal between the world’s largest makers of railway equipment systems may reduce competition, so the two companies may seek to alleviate regulatory concerns with concessions. The deal is anticipated to occur in the final quarter of 2016. WAB shares are up by a little less than 1% since the start of 2016. Robert Bishop’s Impala Asset Management added a 443,875-share stake in Westinghouse Air Brake Technologies Corp (NYSE:WAB) to its portfolio during the first quarter.

The next page of this article will reveal Cryder Capital’s three-largest equity holdings as of the end of the June quarter.

#3. Alliance Data Systems Corporation (NYSE:ADS)

 – Shares Owned by Cryder Capital (as of June 30): 87,222

 – Value of Cryder Capital’s Holding (as of June 30): $17.09 Million

Cryder Capital Partners LLP upped its stake in Alliance Data Systems Corporation (NYSE:ADS) by 11% during the three months that ended June 30, to 87,222 shares. The reshuffled stake was worth $17.09 million at the end of June and made up 13.7% of the investment firm’s U.S equity portfolio. According to a fresh 13D filing, Jeffrey Ubben’s ValueAct Capital Management LP owns 4.00 million shares of the customer loyalty program operator, which equates to a 6.8% stake. More importantly, the filing says the activist investor plans to have conversations with the company’s management and Board, regarding ways to enhance shareholder value. The provider of data-driven marketing and loyalty solutions has seen the value of its stock plunge by 24% since the beginning of the year, mainly due to a series of financial results that disappointed investors. The shares of the Texas-based company that operates card loyalty programs such as the well-known AIR MILES reward program are changing hands at around 11.1-times expected earnings, below the forward P/E multiple of 16.6 for the S&P 500 Index.

#2. HCA Holdings Inc. (NYSE:HCA)

 – Shares Owned by Cryder Capital (as of June 30): 237,901

 – Value of Cryder Capital’s Holding (as of June 30): $18.32 Million

The investment firm run by Ferdinand Groos increased its position in HCA Holdings Inc. (NYSE:HCA) by 10% during the April-to-June quarter, to 237,901 shares. The increased position in HCA was valued at $18.32 million on June 30, constituting 14.7% of the firm’s equity portfolio. The private hospital operator has greatly benefited from the expansion of health insurance under the so-called Obamacare in recent years, thanks to increased patient admissions and reductions in unpaid bills. The largest hospital chain operator in the U.S has seen its shares gain an impressive 17% since the beginning of the year. Analysts believe the shares of HCA Holdings have more room to run should the presumptive Democratic nominee, Hillary Clinton, be elected as the next U.S president in November, as she has promised to further expand the Affordable Care Act. Ray Carroll’s Breton Hill Capital reported owning 12,106 shares of HCA Holdings Inc. (NYSE:HCA) through the current round of 13F filings.

#1. Thermo Fisher Scientific Inc. (NYSE:TMO)

 – Shares Owned by Cryder Capital (as of June 30): 124,924

 – Value of Cryder Capital’s Holding (as of June 30): $18.46 Million

Thermo Fisher Scientific Inc. (NYSE:TMO) was the largest equity holding in Cryder Capital’s U.S portfolio at the end of the June quarter, accounting for 14.8% of the portfolio’s value. The London-based asset manager lifted its position in the company by 10% during the second quarter, to 124,924 shares valued at $18.46 million on June 30. In early June, analysts at boutique investment bank KeyBanc Capital Markets raised their price target on the lab and medical equipment company to $167 from $154, citing sustained near-term momentum in the company’s end markets. Thermo Fisher Scientific also has high exposure to the academic and government sector, which is anticipated to get a boost from increased funding from the National Institute of Health. KeyBanc analysts were also optimistic about the company’s recently-announced $4.2 billion-acquisition of FEI Company (NASDAQ:FEIC), which produces electron microscopes used to analyze proteins. Larry Robbins’ Glenview Capital owned 3.61 million shares of Thermo Fisher Scientific Inc. (NYSE:TMO) on March 31.

Disclosure: None