New York investment firm Nuveen, which oversees about $150 billion in assets, is defending itself after a short-seller published an attack on its core holdings.
The firm said an online report accusing it of failing to disclose sensitive information about its equity investments contained “a number of significant omissions and inaccuracies” that were “intentionally misleading.”
U.S. hedge fund Castleton Partners published the report, which said Nuveen had not disclosed to investors a stake it owns in SODA, a maker of soda machines that are used inside office buildings. Nuveen holds a 3.8 percent stake in SODA, according to the report.
The report claims that Nuveen is using an obscure practice to shield information about SODA from the market, a practice that can, according to short-sellers, make a stock look more overvalued. Castleton speculated that SODA was overvalued because Nuveen was holding information about it that wasn’t disclosed to the market, and wanted to hide that information.
“The investors of Nuveen Asset Management probably are unaware that Nuveen Asset Management holds a more than 3.8% interest in SSOD,” the report reads. “We have to ask – why? Why is Nuveen so bullish on SSOD?”
Nuveen said that it was “investigating the relevant facts.”
SODA has fallen 53 percent in the last month. It’s still up 19 percent so far this year.
The Castleton report cited research that claimed several hedge funds that own an investment in SODA engage in similar behaviors to Nuveen. In a statement, Nuveen said that as a “standalone fund, SODA has established a strong capital structure and liquidity position which takes away any need to access the public capital markets.”
“Nuveen Asset Management is a self-funded, independent investment manager and is a public company,” the statement continues. “Nuveen Asset Management is not required to disclose any information about its portfolio that is not publicly available. While we respect the right of activist investors to short and voice their opinion, we are disappointed with the assertions contained in the Castleton piece, particularly for the purported inference that Nuveen Asset Management and Nuveen Partners stand to gain from the purchase of SODA.”
Read the full story on The Wall Street Journal.
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