Brown University has a large stake in a stock that has plummeted so far in 2020.
The Ivy League school disclosed in a form filed with the Securities and Exchange Commission that Brown owned 7.2 million shares of
(ticker: ORCC) at the end of 2019. Brown also said he had large amounts of Series C
Brookfield Asset Management
inventory (DOCU). Brown’s U.S.-traded stock portfolio totaled $183.6 million at the end of 2019.
Brown’s Owl Rock stake made up the bulk of this portfolio, with a valuation of $129.1 million as of December 31; as of Friday’s close, however, those shares were worth just $114.8 million. Owl Rock, a business development company (BDC), has seen its shares fall 11.1% so far in January, as the
index, a proxy for the stock market in general, rose 2.0%.
Raymond James analyst Robert Dodd had downgraded Owl Rock on January 3 to Underperform from Market Perform. Dodd wrote in a research report that Owl Rock’s stock would lag other BDC peers “due to technical factors related to its pre-IPO stock lockouts expiring.” . Shares of Owl Rock had gone public at a price of $15.30 each in July and ended 2019 at $17.89, a gain of 16.9%.
Brown, now the third-largest holder of Owl Rock, according to S&P Capital IQ, had been an early investor. Owl Rock had sold shares in private placements years before its IPO. As of June 2016, the university owned 3 million Owl Rock shares, a 10.3% stake at the time, according to SEC records. By August 2017, Owl Rock placed more shares, dropping Brown’s stake to 4.3%.
The lower percentage ownership meant that Brown was no longer included in Owl Rock’s regulatory filings as an entity with 5% or more of the shares. Additionally, Brown was no longer required to file SEC forms for transactions in Owl Rock stock; he could have sold all his shares without notice.
The only reason Brown has now disclosed his investments to regulators is that his publicly traded stock holdings totaled more than $100 million, requiring the university to file so-called Form 13F, which details holdings at the end of a quarter. Brown’s latest 13F is the school’s first since at least 2016, and it’s unclear when Brown last filed the form, if ever.
Brown declined to comment on his individual stock investments.
Brown’s total endowment jumped 12.4% to $4.2 billion in fiscal 2019, which ended in June.
The other big school stocks are doing better than the Owl Rock stocks. Series C Liberty Broadband shares soared 74.6% in 2019 and are up 3.5% so far in January. Brookfield, an alternative asset manager, and DocuSign, an electronic signature technology company, saw their respective shares climb 50.7% and 84.9% respectively last year; so far in 2020, they are up 7.9% and flat, respectively.
Inside Scoop is a regular Barron column that covers the stock trading of corporate executives and board members – the so-called insiders – as well as major shareholders, politicians and other high profile figures. Due to their insider status, these investors are required to disclose stock trades to the Securities and Exchange Commission or other regulatory groups..