One more name that Greenlight added onto in the last quarter is DST Systems (DST). DST is a mid-cap technology stock whose main business is providing portfolio accounting services to mutual funds -- that niche operation makes up more than two-thirds of DST's total sales. The firm also provides printing and mailing services for the telecom and healthcare industries.
By taking care of back-office functions for scores of mutual funds, DST reduces clients' costs, particularly at smaller funds or fund families that don't have the benefits of paying for in-house back-office staff. And because DST's services are so nuanced, customer stickiness is extremely high; funds can't switch providers or move their back-office work in-house without incurring massive headaches. For that reason, DST owns close to half of the outsourced back-office market in the mutual fund world.The firm also owns a portfolio of various and sundry assets, ranging from real estate to private equity holdings. While that positioning makes DST less of a pure-play service firm, it also gives the company access to liquidity that it can raise without selling off important parts of its business. Greenlight picked up 442,000 shares of DST in the last quarter, bringing Einhorn's stake in the firm to $85 million. To see the rest of David Einhorn's plays, including a complete list of which stocks he added or sold off, check out the Greenlight Capital Portfolio on Stockpickr.-- Written by Jonas Elmerraji in Baltimore.
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