Mid Cap Strategy Exits Crown Castle After 4.42% Monthly Rise, Cites CapEx Slowdown
London Company’s Mid Cap Strategy exited Crown Castle, reallocating capital to higher-conviction ideas despite the REIT’s 4.42% one-month return, citing slower carrier CapEx and potential DISH-related earnings noise as near-term headwinds. The firm retains the stock in its Income Equity portfolio, citing durable pure-play tower assets and healthy dividend yield.
1. Strategy Exit and Rationale
London Company Mid Cap Strategy exited Crown Castle to reallocate capital to higher-conviction ideas, citing slower carrier capital expenditures and potential DISH-related earnings volatility as near-term headwinds. The separation of fiber and small-cell businesses has clarified core tower assets but muted expectations pending operator spending.
2. Portfolio Performance vs Benchmark
The strategy delivered a 3.2% return in the fourth quarter (3.0% net), outperforming the 0.2% rise in the Russell Midcap Index. Crown Castle posted a 4.42% gain over the past month but has declined 3.26% on a 52-week basis, reflecting mixed market sentiment for communication infrastructure REITs.
3. Retained in Income Equity Portfolio
Despite the exit from the midcap sleeve, Crown Castle remains in the Income Equity portfolio, underpinned by durable pure-play tower assets and a healthy dividend yield. The REIT’s underlying fundamentals and long-duration cash flows support income-focused allocations amid mixed growth prospects.
4. Conditions for Re-entry
The firm indicated willingness to re-initiate a position should a clearer catalyst emerge, such as renewed carrier CapEx commitment or resolution of DISH-related uncertainties. Any such development could prompt fresh capital allocation to Crown Castle within the midcap strategy.