This Hedge Fund Made a Big Bet on MuleSoft Months Before Takeout

(Bloomberg) -- Salesforce.com Inc.’s $6.5 billion purchase of MuleSoft Inc. marked a big win for a small hedge fund whose stake in the cloud-software maker at one point represented 20 percent of its holdings.

Christopher Devlin, manager of the $47 million Lynchburg, Va.-based Selective Opportunity Fund, saw his MuleSoft holdings more than double in value after he started accumulating the position in July. In an interview, Devlin said his current stake is worth $11.4 million, for a gain of 110 percent.

In an online post dated Aug. 9 on SumZero, the 32-year-old Devlin said the price paid for MuleSoft was one of the highest in the history of the fund, “but we believe paying a premium was well worth it due to the exceptional quality of the business.”

This Hedge Fund Made a Big Bet on MuleSoft Months Before Takeout

The original thesis on MuleSoft had more to do with the company’s growth trajectory and less to do with a potential takeout. Shares have surged about 33 percent since speculation about the Salesforce deal surfaced on Tuesday.

Devlin, who is also Chief Investment Officer of Selective Wealth Management, a firm with more than $130 million in assets under management at the end of 2017, declined to comment on other investments. However, a couple of his other recent ideas on SumZero also look like winners.

For example, Shutterstock Inc. and Canadian software company Redknee Solutions Inc. are both up more than 50 percent since Devlin recommended the stocks last year. Devlin is ranked fifth all-time on the investment network.

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