Hedge Fund Sells $25.6 Million in Paramount Group Stock as Rithm's $1.6 Billion Deal Looms
Key Points
Boston-based Solel Partners sold 4.2 million shares of Paramount Group in the third quarter for an estimated $25.6 million.
The transaction value equaled 4.9% of the fund’s reportable U.S. equity assets under management (AUM) at quarter-end.
Solel reported no remaining shares or position value in Paramount Group following the sale—making this an exit for the fund.
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Boston-based Solel Partners exited its entire stake in Paramount Group (NYSE:PGRE), selling 4.2 million shares for an estimated $25.6 million in the third quarter, according to an SEC filing on Friday.
What Happened
Solel Partners fully liquidated its holding in Paramount Group (NYSE:PGRE) during the third quarter, according to a filing with the Securities and Exchange Commission released Friday. The fund sold 4,202,729 shares, with the estimated value of the transaction based on quarterly average pricing totaling $25.6 million. After the move, Solel Partners LP no longer listed Paramount Group among its holdings.
What Else to Know
Top holdings after the filing:
- NYSE: UNH: $71.3 million (13.7% of AUM)
- NYSE: BRSL: $59 million (11.4% of AUM)
- NYSE: CVS: $53.8 million (10.4% of AUM)
- NYSE: SYF: $52.5 million (10.1% of AUM)
- NYSE: TNL: $46.8 million (9.0% of AUM)
As of Friday, shares of Paramount Group were priced at $6.55, up 30% over the past year and well outperforming the S&P 500's nearly 15% gain in the same period.
Company Overview
| Metric | Value |
|---|---|
| Revenue (TTM) | $723.3 million |
| Net Income (TTM) | ($97.4 million) |
| Market Capitalization | $1.5 billion |
| Price (as of market close Friday) | $6.55 |
Company Snapshot
Paramount Group, Inc. is a large-scale office REIT with a portfolio concentrated in prime urban centers. The company leverages its expertise in property management and its strategic asset locations to attract and retain top-tier tenants. Paramount's focus on Class A properties in New York City and San Francisco positions it competitively within the office real estate sector. It serves high-quality corporate tenants seeking premium office locations in major U.S. urban markets, with a focus on long-term occupancy and tenant retention.
Foolish Take
For long-term investors, the most telling part of Solel Partners’ exit from Paramount Group is the timing and what the move might signal about capital discipline inside a concentrated portfolio. The fund favors stable compounders like UnitedHealth and CVS (at least based on top holdings)—so stepping away from a 4.2 million-share position may suggest Paramount no longer offered meaningful upside relative to other ideas.
Importantly, 13F filings don’t reveal when during the quarter the sale occurred, and that timing shapes the motivation. If Solel sold earlier in Q3, before Rithm Capital announced it September that it agreed to acquire Paramount for $6.60 per share, the move may have reflected discomfort with the company’s fundamentals.
If the sale happened after the deal’s announcement, the logic is simpler: Once upside is capped and tied to merger timing, the stock effectively becomes a low-return position. For an active manager, putting $25 million into higher-conviction holdings becomes a rational choice.
Ultimately, Paramount’s future now tracks the Rithm acquisition, not its fundamentals. With limited upside and lingering sector uncertainty, most of the real opportunity likely lies elsewhere.
Glossary
Stake: The ownership interest or investment a fund or individual holds in a company.
Liquidated: Sold off an entire investment position, converting it into cash.
Assets Under Management (AUM): The total market value of investments managed by a fund on behalf of clients.
13F Reportable: Refers to holdings that institutional investment managers must disclose in quarterly SEC filings if they exceed certain thresholds.
Class A Office Properties: High-quality, well-located office buildings with premium amenities, typically attracting top tenants.
Real Estate Investment Trust (REIT): A company that owns, operates, or finances income-producing real estate and distributes most income to shareholders.
Tenant Retention: The ability of a property owner or manager to keep existing tenants leasing space over time.
Quarterly Average Pricing: The average price of a security calculated over a specific quarter, used to estimate transaction values.
Fully Integrated: A company that manages all aspects of its operations internally, such as acquisition, leasing, and property management.
TTM: The 12-month period ending with the most recent quarterly report.
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Synchrony Financial is an advertising partner of Motley Fool Money. Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool recommends CVS Health and UnitedHealth Group. The Motley Fool has a disclosure policy.
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