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In this six-part series, we will go through some of the main positions Eton Park Capital traded this past quarter
Eton Park Capital Management is a multi-strategy hedge fund founded in November 2004 by former Goldman Sachs partner Eric Mindich.
The firm started new positions in Family Dollar Stores (FDO) , Constellation Brands (STZ), Sotheby’s (BID), and Equinix Inc. (EQIX) and sold positions in Nielsen Holdings NV (NLSN) and Priceline.com Inc. (PCLN).
Abbreviated financial summaries and metrics for these securities are included below. Detailed analysis and recommendations require a subscription (more information at the bottom of the article).
Why buy Equinix Inc. (EQIX)?
Equinix, Inc., a provider of global data center services, said revenues were $540.5 million for the 3Q 2013, a 3% increase over the previous quarter and an 11% increase over the same quarter last year. It said positive secular trends are driving significant demand in the broader data center market. As capital has flowed into this sector, the market has further segmented and customers continue to embrace more sophisticated infrastructure strategies, such as multitiered architectures and hybrid cloud. these dynamics are creating industry shifts and also a highly competitive landscape in adjacent markets such as cloud services in wholesale co-location. Therefore, the company needs to have a disciplined approach by pursuing customer applications that require high-performance, global reach, ecosystem, access and mission-critical reliability. cloud and IT services delivered record bookings in the quarter and continued to be the highest growth vertical as many cloud players leveraged Platform Equinix to deploy their service. A strategic relationship recently announced with Microsoft will enable Equinix customers to have direct connectivity to Windows Azure in key markets around the world. Its Q3 revenue performance reflected a $3.1 million negative currency headwind when compared to the average rates used in Q2 and a $1.3 million positive impact when compared to the FX guidance rates. It has initiated a cash flow hedging program to limit its future exposure to exchange rate fluctuations for the British pound, the euro and the Swiss franc, thereby, reducing FX volatility on approximately 40% of the EMEA revenues and adjusted EBITDA.
Eton Park Capital founder Eric Mindich has a degree in economics, summa cum laude, from Harvard University. The fund is estimated to have around $19.4 billion in assets under management and has offices in New York, London, and Hong Kong. The fund follows a bottom-up, research-driven approach seeking mispriced assets that fall both within and between conventionally defined investment strategies. It invests in both public and private markets, and investors in the fund generally have their capital committed for between three and five years—considerably longer than the quarterly redemption notices characteristic of many hedge funds. Eton Park has a global approach to investing and flexibly allocates capital between regions in the same bottom-up, idea-driven manner that it applies to investment strategies within a region. It focuses its investments in Europe, North America, Latin America, Eastern Europe, Asia, the Middle East, and South Africa. Cross-border strategies are also an important area of emphasis.