Tracking Michael Dell’s MSD Capital Portfolio - Q2 2016 Update

• Michael Dell’s portfolio decreased ~26% this quarter from $537M to $400M.
• A fairly large position in Esterline Technologies was eliminated while reducing WEX Inc.
• MSD Capital 13F portfolio has just seven positions.

Michael Dell’s MSD Capital 13F portfolio decreased 25.56% this quarter from $537M to $400M - all positions except DineEquity (DIN) and Townsquare Media (TSQ) were either reduced or dropped this quarter. To know more about Michael Dell, check-out the book Direct from Dell: Strategies that Revolutionized an Industry.

Below is a summary of the major moves this quarter:

Asbury Automotive Group (ABG): ABG is currently the largest 13F position at 26.39% of the portfolio. It is a long-term position that has been in the portfolio since 2008. MSD’s cost-basis is very low as they picked up the original position during the market lows of 2008 when ABG traded in the low-single-digits. This quarter saw a ~10% trimming at prices between $52 and $63 and the stock is now at $55.15.

Note: MSD Capital owns ~9% of ABG.

Esterline Technologies (ESL): ESL was a fairly large ~9% portfolio stake as of last quarter. The original position was acquired in Q4 2014 when the stock traded between $104 and $119. About half the stake was sold in Q4 2015 at prices between $71 and $96 and the remaining was disposed of this quarter at prices between $57 and $71. The stock is now at $77.50. MSD Capital realized losses.

PVH Corporation (PVH): PVH is a large 18.86% of the portfolio position. It saw a ~16% reduction this quarter at prices between $83 and $103. The last significant buying happened in Q4 2015 when there was a one-third increase at prices between $73 and $103. The original position was established in 2012: MSD Capital had convertible notes ($47.74 strike) as PVH issued them to raise capital for their Tommy Hilfiger Group acquisition in 2010. The stock is now at $110.

WEX Inc. (WEX): WEX was a 4.24% portfolio stake as of last quarter. It was reduced by ~85% this quarter at prices between $79 and $96. Last quarter had also seen a ~30% reduction. WEX was first purchased in Q2 2008 at a cost-basis of ~$30 when the business was named Wright Express Corp. The stock is now at $105. MSD Capital harvested huge long-term gains.

Northstar Asset Management Group (NSAM) and Wesco Aircraft (WAIR) saw marginal reductions this quarter. Below is a spreadsheet that highlights the changes to Michael Dell's MSD Capital US long stock portfolio.

Below is a spreadsheet that highlights the changes to Michael Dell's MSD Capital US long stock portfolio as of Q2 2016. For a look at how his portfolio has progressed, see our previous update:

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