In the latest development regarding Richard McGuire‘s Marcato Capital Management and the recent target of its activism, Sothebys (NYSE:BID), the $3.19 billion global art business company has agreed to provide Marcato with access to the Redacted Pages from the case Third Point LLC v. Ruprecht, according to a filing with the SEC. Late last month, Marcato acquired an additional 1.5 million shares of Sothebys (NYSE:BID) to take its holding to 6.57 million shares. The stake represents 9.46% of the company’s outstanding common stock.
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Founded in 2010, Marcato invests in small and mid-sized companies. Richard McGuire, the MBA from Harvard University, worked at Bill Ackman’s Pershing Square before he set up his own fund. Currently, Marcato has about $3.83 billion worth of assets under management, while the market value of its public equity portfolio stood at $2.70 billion at the end of March. The finance and consumer discretionary sectors contributed 27% and 33% respectively to the above portfolio value. The top equity holdings included Bank of New York Mellon Corp (NYSE:BK), Lear Corporation (NYSE:LEA), and NCR Corporation (NYSE:NCR), which we’ll discuss later.
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Previously, Marcato filed a Notice of Challenge on May 29 whereby the fund challenged the confidential treatment of the legal proceedings of the above mentioned case. However, Marcato agreed to withdraw the Notice following an agreement with Sothebys on June 5, providing it confidential access to the Redacted Pages. Marcato is the second activist that Sothebys is facing, the first one being Third Point’s Dan Loeb, who ended up winning three board seats last year. However, Marcato is still unsatisfied with the company’s performance and in a letter sent to Sothebys in February, it demanded an immediate $500 million share repurchase program and the replacement of the company’s chief financial officer. So far this year, Sothebys (NYSE:BID)’s stock has appreciated by 7.32%. Loeb’s Third Point is the largest stockholder of Sothebys, holding 6.65 million shares valued at $281.03 million.
Moving on to Marcato’s top picks, the fund acquired some 356,700 shares of Bank of New York Mellon Corp (NYSE:BK) during the first quarter to take its total stake in the company to 18.36 million shares valued at $738.73 million. The stake represents 27.39% of the fund’s portfolio value. The $48.67 billion provider of financial products and services will record a pretax charge of $50 million in the second quarter as part of its $180 million settlement in relation to a foreign exchange class action lawsuit. The hedge fund interest in Bank of New York Mellon Corp (NYSE:BK) rose slightly in the first quarter as 51 funds had invested a total of $6.25 billion in the company as compared to 50 firms with $6.19 billion in the previous quarter. Nelson Peltz‘s Trian Partners is the largest stockholder of Bank of New York Mellon Corp (NYSE:BK) within our database, holding over 30.22 million shares valued at $1.22 billion.
Marcato’s second-largest holding, in Lear Corporation (NYSE:LEA), remained unchanged during the first three months of the year at 3.63 million shares, valued at $402.41 million. The holding constitutes 14.92% of Marcato’s portfolio value. So far this year, Lear Corporation (NYSE:LEA)’s stock has posted hefty gains of 18.45%. After Marcato, Ken Griffin‘s Citadel Investment Group is the largest shareholder of Lear Corporation (NYSE:LEA) owning about 1.71 million shares valued at $189.02 million.
Marcato’s stake in NCR Corporation (NYSE:NCR) is comprised of 10.85 million shares valued at $320.20 million and represents 6.44% of the technology company’s outstanding common stock. The stock of the $5.08 billion provider of solutions to businesses relating to customer interactions has appreciated by 3.36% year-to-date. Among the hedge funds that we track, the popularity of NCR Corporation (NYSE:NCR) dropped during the first quarter as 31 funds had an aggregate investment of $1.61 billion in the company as opposed to 34 funds with $1.82 billion held at the end of the previous quarter. Barry Rosenstein’s JANA Partners is the largest shareholder of the company, owning about 14.81 million shares valued at $437.10 million.
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