After six year of ownership, the trio of private equity (PE) firms that purchased Dunkin’ Brands for $2.4 billion, has effectively cashed out their remaining 30 percent stake. Bain Capital, Carlyle and TH Lee took a $500 million stock buyback in July 2012; the trio had already cashed out their investment through stock sales initiated after the July 2011 initial public offering (IPO).

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Based on SEC filings to date, it appears that the following three institutional investors will comprise 68.1 percent – or the vast bulk of the DNKN’s total ownership:

• Fidelity Investments (seven separate funds), 38.5%
•Prudential and its money management firm, Jennison, 19.2%
•Morgan Stanley (two funds) 10.4%
This is extraordinarily highly concentrated ownership versus other stocks. The top three investors will have significant power and attention.

Other significant investors include Vanguard, Oppenheimer and Hartford (9.9% combined). One hedge fund investor, Coative Management, owns 3.7%. Company insiders, chiefly Jon Luther and Nigel Travis, own 2.7%. It is estimated that Dunkin’ franchise owners have just a tiny ownership portion, less than 1%.

Institutional investors (e.g., mutual funds, pension plans) are passive investors and tend to be hands-off operationally, yet are oriented towards extraordinary stock price returns. Most of their shares trade via computer programs. They receive large amounts of attention from company executives and stock analysts.