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A few managers boost Herbalife stakes in first quarter joining Soros, Icahn
May 15, 2015 / 11:17 PM / 3 years ago

A few managers boost Herbalife stakes in first quarter joining Soros, Icahn

BOSTON (Reuters) - A handful of big money managers boosted their stakes in Herbalife Ltd (HLF.N) during the first quarter, joining billionaire investors Carl Icahn and George Soros in their gamble the company will overcome a raft of U.S. federal investigations.

The Herbalife logo is seen on a building housing some of their offices in downtown Los Angeles, California April 28, 2013. REUTERS/Lucy Nicholson

Investments in Herbalife have been closely watched ever since billionaire investor William Ackman first announced a $1 billion short bet and accused the company of being a pyramid scheme in 2012, triggering investigations by the U.S. Securities and Exchange Commission and the Federal Bureau of Investigation.

Herbalife denies the allegations.

During the first quarter Route One Investment Company upped its holdings by 145 percent to 1.8 million shares while Capstone Investment Advisors increased their holdings by nearly 42 percent to own 1.05 million shares. Indus Capital Partners increased its stake by 205 percent to 634,759 shares.

Hotchkis & Wiley Capital Management became a new shareholder by buying 828,600 shares.

The managers rank among the 30 biggest investors in Herbalife and on Friday filed their quarterly holdings reports as required by the Securities and Exchange Commission.

Data for what some of the other large mutual funds, including Vanguard Group, Capital World Investors, and State Street Global Advisors, have done has not yet been tabulated to show possible changes.

Meanwhile the investors most prominently associated with Herbalife, Carl Icahn and Soros Fund Management, kept their holdings unchanged.

Icahn, Herbalife’s largest shareholder, held onto his 17 million share stake while George Soros’ Soros Fund Management, the company’s sixth-largest owner, kept its 3.45 million share stake unchanged.

The fund managers announced their holdings in filings with the Securities and Exchange Commission which requires them to reveal what U.S. stocks they owned 45 days after the end of the quarter.

Huber Capital Management kept its stake steady at 1.6 million shares.

Since the start of the year, Herbalife’s stock price has climbed 26 percent to close at $47.35 on Friday.

Managers made their bets as the company reported that fourth-quarter revenue fell short of expectations and it cut its forecast. But first-quarter results, released last week, beat analysts’ expectations and the company lifted its earnings forecast for 2015.

To be sure not all managers are as enthusiastic. At Fidelity Management & Research Company, which ranks as Herbalife’s second-largest shareholder, fund managers cut the company’s holdings by 3 percent, selling 459,282 shares. Fidelity did not break out which fund managers had sold the stock.

Reporting by Svea Herbst-Bayliss; Editing by Lisa Shumaker and Andrew Hay

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