Sachem Head, D.E. Shaw bought ADP stock in first quarter

(Reuters) - Hedge funds Sachem Head Capital Management and D.E. Shaw Group bought stock in Automatic Data Processing Inc (NASDAQ: ADP) months after activist investor Bill Ackman began prodding the payroll-processing firm to perform better, according to regulatory filings made with the U.S. Securities and Exchange Commission on Tuesday.

Sachem Head, which is run Scott Ferguson, bought nearly 2 million shares of ADP during the first quarter. D.E. Shaw meanwhile increased its stake in ADP by 58 percent to own 2.1 million shares at the end of March,

Ackman's roughly $8 billion Pershing Square Capital Management hedge fund owns 7.9 million shares in ADP. On Tuesday he told his investors that there are signs of improvement at the company and that relations have thawed since last year's bitter proxy contest which he lost in November.

ADP's stock price has climbed 30 percent since January and has helped push Ackman's funds into the black, he said on an investor call.

The Wall Street Journal first reported Sachem Head and D.E. Shaw's stakes in ADP before the filings were made released.

Sachem Head manages $3.7 billion and its founder, Scott Ferguson, used to work for Ackman at Pershing Square, suggesting he is familiar with his old boss' way of thinking.

At the end of April Sachem Head's main fund was down roughly 2.5 percent after a 12.3 percent gain last year, according to a document seen by Reuters.

D.E. Shaw, Sachem Head and ADP did not immediately respond to requests for comment.

(Reporting by Munsif Vengattil, Parikshit Mishra, Subrat Patnaik in Bengaluru and Svea Herbst in Boston; editing by Sriraj Kalluvila)

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