JANA Partners’ new positions
Barry Rosenstein’s JANA Partners revealed new positions in the fourth quarter in its year-end investor letter. The fund disclosed positions in Equinix Inc (EQIX), Juniper Networks, Inc. (JNPR), Airbus Group NV (EADSF), and Cameron International Corporation (CAM). The $8 billion activist hedge fund also told clients that it plans to close its Nirvana Fund to new investors on or around April 1. The letter further stated that it might close JANA Partners to new investors “at some point in the future, depending on the opportunity set.”
For more on JANA Partners and the fund’s 3Q 2013 positions, please click here.
The hedge fund firm’s flagship JANA Master fund gained 20.4% net of fees and expenses in 2013. On performance, the letter said:
Why buy Equinix (EQIX)?
Equinix Inc. (EQIX) accounted for a 4.33% position, according to JANA’s 3Q 2013 portfolio. The investor letter stated the fund started building its position late in the second quarter and continued to purchase the shares in the third and fourth quarters.
JANA’s letter explained:
The letter further stated:
In September 2012, Equinix’s board approved the conversion to a REIT, and the conversion is scheduled to complete in January 2015. The stock took a dive in 2Q 2013, after news reports that the Internal Revenue Service was scrutinizing Equinix’s eligibility for REIT status. A REIT conversion is expected to benefit the company since REITs pay lower taxes and higher dividends than other companies. In November, both Equinix and its peer Iron Mountain Inc. (IRM) said the IRS is proceeding to evaluate their eligibility. Equinix believes it’s eligible for REIT status “based on both existing legal precedent and the fact that other data center companies currently operate as REITs.” These include CoreSite Realty (COR), Digital Realty Trust (DLR), and DuPont Fabros Technology (DFT).
In December 2013, Equinix announced a share repurchase program of up to $500 million through December 31, 2014.
In January 2014, Equinix announced plans to invest approximately $60 million to build a new data center called ME1 in Melbourne. The company will also open a new data center called LD6 in its highly successful London Slough campus. With $79 million of capital expenditures invested, the first phase is scheduled to open in the first half of 2015. The company also recently announced an alliance with AT&T to speed enterprise adoption of cloud services.