Firm goes on Qwest buying spree
By Andy Vuong, Staff Writer
Friday, June 8, 2007
A global investment management firm known for its quantitative
models has quietly snatched up tens of millions of Qwest shares
over the past two years.
Acadian Asset Management, which uses "sophisticated analytical
models" to make its stock picks, held 65.6 million Qwest shares
at the end of the first quarter, up from 7.6 million shares
during the same period in 2006, according to regulatory filings.
The Boston-based company added more than 40 million Qwest shares
during the fourth quarter alone. It is the seventh-largest
Qwest shareholder, with a 3.5 percent stake.
Acadian's increased holdings in Qwest are a sign that the
Denver-based telecommunications company's financials fit the
metrics of Acadian's computer model, said Stifel Nicolaus
analyst Chris King.
"They tend to have a little less flexibility with respect to
their investments and their decision-making," King said.
"They've got a quant model, and they tend to follow it pretty
Acadian factors in valuation, earnings potential, financial
quality and price movements to assess how a stock will perform
relative to its peer group, according to its website.
The company's database covers more than 25,000 securities in
more than 60 markets worldwide.
Denver-based Qwest, which provides local phone service in 14
states and operates a nationwide fiber-optic communications
network, has returned to sustainable profitability over the past
year after flirting with bankruptcy five years ago. The
company's debt has been reduced to $14.9 billion from about $26
billion in 2002, and it is on a run of five straight quarterly
Officials for Acadian, which has $69 billion under management,
didn't return calls seeking comment.
Qwest spokeswoman Diane Reberger said the company monitors its
stock activity, but wouldn't comment directly about a specific
Acadian holds fairly minor stakes in the other Baby Bells, with
1.1 million shares of AT&T and 87,470 shares of Verizon
Despite a steep drop Thursday, Qwest stock price is up 16
percent this year. Qwest shares fell 38 cents, or 3.74 percent,
to close Thursday at $9.77. Other telecom stocks also took a
hit amid rising interest rates.
Firm seeks market inefficiencies
London-based Old Mutual is the parent company of Acadian, a
20-year-old firm whose clients include public and corporate
pension plans, governments and private individuals.
Acadian's investment strategy states that "stocks are often
mispriced relative to fair value, and that these pricing
inefficiencies can be exploited by an active, disciplined
The year-to-date performance of Acadian's Emerging Markets Fund
ranks 29th out of 248 funds with a return of 16.95 percent,
according to Denver-based research firm Lipper.
The fund has $856 million in assets under management, the
largest of any Acadian fund monitored by Lipper.
Staff writer Andy Vuong can be reached at 303-954-1209 or