"Somebody Is Dumping Everything": Mystery Investor Pukes $333M In Real Estate ETF In Dark Pool Trade

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by Tyler Durden
Wednesday, May 20, 2020 - 01:30 PM

Post-coronavirus pandemic, nobody really knows what the real estate market will look like. Will people travel less? Will we work from home more often? Will commercial and residential real estate be able to keep their respective bids once current leases run out?

We've found at least one investor who doesn't want to stick around and find out.

One "mystery investor" blew out more than 10.5 million shares of an S&P 500 Real Estate fund last week, representing a $333 million sale. This amounts to about 7.4% of outstanding shares in the Real Estate Select Sector SPDR Fund, a macro indicator of the industry’s largest companies, according to The Real Deal

One anonymous investor commented: “That is obscene. It would be like Warren Buffett selling Delta all at once. A very large institution is expecting widespread weakness across the real estate market, more so than is already perceived.”

The fund trades under the symbol XLRE and includes holdings like Prologis and Equity Residential and AvalonBay Communities. At least half of its shareholders are institutional investors, including names like BlackRock and Merrill Lynch, TRD notes. 

The trade was made on one of the 53 dark pools registered with the SEC, which is probably why it escaped investor scrutiny when it happened. Per regulations, dark pools only have to report the transaction as it happened and not the names of the parties involved in buying and selling. To that end, the seller remains a mystery. 

The trade was confirmed, however, by Stefanie Kammerman, a former trader at Schonfeld Securities, from a dark-pool data feed. She said the shares were sold below the market price and that about 20 minutes before the trade, another entity sold 991,700 shares of the XLRE at the same price in a similar transaction. The ETF, meanwhile, was up about 5% on the day. 

“It’s very odd there’s anything big on [XLRE],” she commented about the trade. “It looks like somebody’s dumping everything in my opinion. There’s something very big going on.”