Michael Dell Trims the Fat From His Portfolio
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By Ashlee Vance
The New York Times
February 2, 2009, 4:26 pm
Michael Dell is reducing his bets on the fattening of the American public.
MSD Capital, the firm that manages about $10 billion in assets for Mr. Dell, the founder and chief executive of Dell, has been selling off stakes in some gut-busting investments. For example, MSD’s stake in Domino’s Pizza has dropped from about 5 percent to less than 1 percent over the past year, and the company recently disgorged its 9 percent ($21 million) investment in Steak n Shake. (That’s a tragedy, if you ask me. Can you beat the Steakburger and cheese fries?)
Gone as well are MSD’s holdings in Darling International, which collects and renders cooking oils, animal fats and other kitchen wastes.
Still, MSD remains committed to greasy spoons — he’s the second-largest shareholder in DineEquity, the company that owns IHOP and Applebee’s. (The largest shareholder in DineEquity is Southeastern Asset Management, a Memphis investment firm that also happens to be the second-biggest investor in Mr. Dell’s namesake computer company as well as the largest shareholder in Dell rival Sun Microsystems.)
While Mr. Dell, a biking fanatic, is reducing his support for America’s ever-expanding waistline, he has remained committed to real estate, cars and finance.
As I wrote in an article published Monday, MSD’s vast real estate holdings in Hawaii, California and Mexico have opened up opportunities for ValleyCrest -– a company controlled by Mr. Dell that is the largest landscape design, installation and maintenance company in the United States.
A large chunk of MSD’s real estate action occurs through Related Companies, a development firm with claims on a number of prominent properties. In 2007, MSD Capital, Goldman Sachs and Mubadala Development pumped $1.4 billion into Related. Mubadala is also a large investor in Advanced Micro Devices, one of Dell’s main chip suppliers.
MSD Capital has invested in rental car companies and luxury car dealerships and has its own auto division.
On the finance front, MSD Capital recently joined a group of investors that dished out $13.9 billion to buy IndyMac, a failed mortgage lender that had been seized by the federal government.
Mr. Dell’s personal fortune appears to have taken a beating right alongside the financial markets. He has more than 220 million shares of Dell, which has seen its stock price tumble from $26 per share last August to $9.31 per share on Monday.
In addition, MSD Capital now states that it manages more than $10 billion for Mr. Dell, but it used to claim more than $12 billion in assets. |
