The London Company Mid Cap Strategy's recent decision to exit its position in Crown Castle Inc. (CCI) reflects a dynamic approach to investment management, prioritizing higher-conviction opportunities. This article explores the context of this strategic move, including the firm's performance in Q4 2025, the rationale behind divesting from CCI, and the broader market factors influencing such decisions.
Strategic Divestment: Sharpening Focus for Enhanced Returns
The London Company's Q4 2025 Performance Overview
In the fourth quarter of 2025, The London Company's Mid Cap Strategy demonstrated robust performance, delivering a 3.2% return (3.0% net). This surpassed the Russell Midcap Index's modest 0.2% increase, highlighting the effectiveness of the firm's stock selection and sector exposure strategies. This period also saw US equities recording their third consecutive quarter of growth, with the Russell 3000 Index climbing 2.4%, as investors navigated between optimistic earnings forecasts and concerns regarding AI's impact and a moderating macroeconomic environment.
Crown Castle Inc. (CCI): A Closer Look at the Investment
Crown Castle Inc. (NYSE:CCI) operates as a real estate investment trust specializing in communication infrastructure. As of February 24, 2026, CCI's stock stood at $88.64 per share, having gained 4.42% over the preceding month, though it experienced a 3.26% decline over the past year. With a market capitalization of approximately $38.601 billion, CCI remains a significant player in its sector.
Rationale Behind the Divestment from Crown Castle Inc.
The London Company's Mid Cap Strategy opted to divest from Crown Castle Inc., reallocating capital towards investments promising higher conviction. While the firm continues to hold CCI in its Income Equity portfolio, recognizing the inherent strength of the industry and its appealing dividend yield, the decision for the Mid Cap Strategy was driven by the pursuit of clearer growth catalysts. The improved transparency regarding CCI's core pure-play tower assets, following the separation of its fiber/small-cell businesses, was noted. However, a slowdown in carrier capital expenditure is anticipated to temper near-term expectations. Despite potential earnings volatility stemming from DISH-related issues, the fundamental durability of CCI's business model remains intact. The London Company indicated a willingness to reconsider an investment in CCI should more definite catalysts emerge in the future.
Broader Market Perspective and Future Investment Focus
While Crown Castle Inc. (NYSE:CCI) attracts attention, it does not feature among the top 30 most popular stocks favored by hedge funds. Data from the fourth quarter indicates 55 hedge fund portfolios held CCI, a slight decrease from 56 in the prior quarter. The London Company acknowledges CCI's investment potential but suggests that certain AI stocks may offer superior upside with reduced downside risk. The firm's strategic focus appears to be shifting towards identifying undervalued AI stocks that could benefit significantly from current economic trends, such as Trump-era tariffs and the onshoring phenomenon.
