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jerryking : william_ackman   17

Chief executives are outsourcing their responsibilities to activists
AUGUST 25, 2017 | FT | Matthew Vincent.

Sometimes complying with activists can seem no different to using management consultants. But if CEOs simply let activists call the shots, what are we paying them millions for? This only puts shareholders in the position of besieged householders on Halloween: doling out treats to the greedy but undeserving.
CEOs  shareholder_activism  Pershing_Square  William_Ackman 
may 2018 by jerryking
An Activist Investment in Whole Foods Exposes Shifting Power on Wall St. - The New York Times
APRIL 25, 2017 | NYT | By ALEXANDRA STEVENSON.

Neuberger Berman has eschewed its nearly 80-year-old tactic of playing nice (i.e. buy and hold stocks, sit back, and hope for the best), turning to the bare-knuckled world of activist investors made famous by the likes of Carl C. Icahn and William A. Ackman. Last year, as Neuberger Berman’s roughly $200 million investment in Whole Foods Market languished, the firm quietly approached some hedge funds and urged them to agitate for change at the high-end grocer. Two weeks ago, Jana Partners took up the fight......Neuberger Berman’s behind-the-scenes campaign to shake up Whole Foods is the latest example of a dynamic that is upending relations between public companies and the big investors that own their stock.....a reflection of the shifting balance of power on Wall Street....Traditional money managers in search of market-beating returns are demanding a seat at the table, turning to activists for help and even employing some hedge fund tricks of their own. And activists, once the black sheep of the investment world, are now accepted as regular, if meddlesome, investors. ....[Activist investors], she added, “[are an] important ‘check and balance’ on management that has lost its way.”....Neuberger Berman executives prepared an inch-thick presentation--a thorough critique--the kind of document usually produced by activists.....failures in how Whole Foods handled its brand development, and to what it said were customer service deficiencies and a poor strategy for distribution......Relations between institutional investors and activists have evolved in recent years, and it is not unheard-of for big investors to support activists who have set their sights on a high-profile company. ..... be careful of what you wish for, Neuberger Berman discovered that utilizing board seats on an underperforming portfolio company can be "expensive and time-consuming.”.....it is less common for an institutional investor to share its work on a specific target with activists in the way Neuberger Berman did with Whole Foods....There is even a term for the interplay: “R.F.A.s” or “requests for activism.”....Institutional investors do not make investments predicated on an activist showing up.
Wall_Street  money_management  shareholder_activism  beat_the_market  hedge_funds  Whole_Foods  Jana_Partners  Neuberger_Berman  institutional_investors  checks_and_balances  Carl_Icahn  William_Ackman  boards_&_directors_&_governance 
april 2017 by jerryking
The humbling of Valeant’s Michael Pearson - The Globe and Mail
TIM KILADZE
The humbling of Valeant’s Michael Pearson
SUBSCRIBERS ONLY
The Globe and Mail
Published Tuesday, Mar. 22, 2016

What we’re left with: A “Canadian” company we should happily disown, and critical reminders that certain business rules should never be broken. Chief among them: Debt is never a problem until, suddenly, it is; markets will love you until, suddenly, they don’t; and the roll-up game, driven by endless acquisitions, is nearly impossible to sustain.....By slashing R&D spending costs, Mr. Pearson freed up cash flow to buy more companies – whose R&D departments were then gutted to repeat the same trick. To juice earnings, he acquired Ottawa-based Biovail in 2010, which came with a Barbados-based subsidiary. Valeant started ushering U.S. profits to offshore tax domiciles – marking the first-ever pharmaceutical tax inversion and sending its corporate tax rate to the mid-single digits.

To fuel acquisitions, Mr. Pearson borrowed tens of billions of $ of incredibly cheap debt. By mid-2015, Valeant had $31-billion (U.S.) in debt and paid over $1-billion a year in interest.

There were warning signs these bold acts would backfire. Last March, Warren Buffett’s inner circle started to inflict damage. At an investor meeting, Charlie Munger, one of the value investor’s best friends, said he was “holding his nose” by looking at Valeant, adding that the company “wasn’t moral.”

That cautionary message did little to deter two of Valeant’s top investors: the Sequoia Fund – which has ties to Mr. Buffett – and Bill Ackman’s Pershing Square Capital Management. Whatever criticisms were hurled at the drug maker, they stood by it, repeatedly stressing that they believed in Mr. Pearson. Their faith in him seemed nearly biblical. And because they showed resolve, hedge funds kept piling in – momentum investing at its very worst. By the end of June, nearly 100 of them had stakes in the drug maker........One of the best lessons from the global financial crisis was that everything became correlated when the U.S. housing market crashed. The same is true for Valeant. Investigations into its pricing policy made investors worry about revenue; worries about the income statement morphed into fears about balance-sheet debt; leverage woes prevented Valeant from borrowing more to fund future acquisitions.

The cynicism turned investors’ momentum strategy on its head.
Valeant  Bay_Street  CEOs  pharmaceutical_industry  Charlie_Munger  Warren_Buffett  M&A  boards_&_directors_&_governance  correlations  hedge_funds  Pershing_Square  William_Ackman  debt  R&D  cash_flows  roll_ups 
march 2016 by jerryking
Bill Ackman and His Hedge Fund, Betting Big - NYTimes.com
By ALEXANDRA STEVENSON and JULIE CRESWELLOCT. 25, 2014

“We certainly have to make bigger investments, that’s definitely true. But not riskier investments.” Asked about failures, like the Target bet, he sighed deeply. “Target was a bad investment,” he said, “but out of 30 investments, I don’t know of another investor with as high a batting average.”...Mr. Ackman’s role as an activist hedge fund investor is to persuade other shareholders that he knows how to run companies better than current management does. This involves research, argument and, perhaps most important, a sensitivity to how every pronouncement and gesture will be perceived....“I said, the next time I have a really good idea, I’m not going to listen just because someone is older than me.” Mr. Ackman continued, “It’s not going to stop me from going forward.”...His first foray into activist short-selling was in the spring of 2002, when he released a 48-page, scrupulously researched paper criticizing the management and reserve levels of the Federal Agricultural Mortgage Corporation....At Gotham, he learned that he needed research and a story. At Pershing, he perfected the skill of telling that story to an audience of shareholders, corporate directors and the news media.... he has spent $50 million just on research and legal fees for his campaign ...
Communicating_&_Connecting  big_bets  hedge_funds  investors  shareholder_activism  storytelling  William_Ackman 
october 2014 by jerryking
Wes Hall: From mail room clerk to Bay Street power broker
Jan. 30 2014 | The Globe and Mail | Doug Steiner.

Welcome to the full-combat world of activist investing. Wall Street agitators such as Bill Ackman, Barry Rosenstein and Carl Icahn, and a small but growing number of Canadians, such as Greg Boland of West Face Capital, want underperforming executives to raise shareholder returns fast, or get out of the way. And they come armed with detailed business makeover plans, lawyers, investment bankers, PR reps and what, over the past decade, has become one of the most powerful weapons in their arsenal: the proxy solicitation and advisory specialist....What does a proxy specialist do? A generation ago, the job was little more than an administrative position–arranging annual meetings and monitoring the collection of proxy forms from docile shareholders who didn’t have the inclination to attend, and whose shares would then be voted in favour of existing directors and management. Hall began his career in that routine end of the business in the 1990s. He founded Kingsdale in 2003 because he saw a growing and profitable niche: Activists and target regimes needed high-level advice and coaching in shareholder disputes.

Now Hall and a handful of other top Canadian specialists are like the superstar managers who hatch U.S. presidential campaigns. They plot strategy, control written communications to investors, stage cross-country tours, corral shareholder votes and whip their candidates–be it the activist or the target company–into shape, keeping them focused and on-message.
Doug_Steiner  Bay_Street  entrepreneur  movingonup  power_brokers  hedge_funds  West_Face  shareholder_activism  boards_&_directors_&_governance  William_Ackman  Pershing_Square  CP  public_relations  African_Canadians  Wes_Hall  proxy-advisory  niches  insights  superstars 
february 2014 by jerryking
With Huge War Chests, Activist Investors Tackle Big Companies - NYTimes.com
August 30, 2013, 9:01 pm 14 Comments
With Huge War Chests, Activist Investors Tackle Big Companies
By MICHAEL J. DE LA MERCED and JULIE CRESWELL

In the 1980s, corporate raiders like T. Boone Pickens and Carl C. Icahn engaged in hostile takeovers or leveraged buyouts of companies, or sought to be bought out themselves at a profit. (Some of yesterday’s raiders, like Mr. Icahn, are today’s more public-relations-friendly “activists.”) In the 1990s, big pension funds like the powerful California Public Employees’ Retirement System took up the mantle, pressing for change not only in corporate governance but also on social issues like doing business in apartheid-era South Africa and protecting the environment.

Unlike the raiders, the current activists contends they are fighting for the interests of shareholders. To that end, the activists most often seek to appoint allies to board seats to help fight against what they see as complacent management and to bring more discipline to companies.
shareholder_activism  large_companies  hedge_funds  Microsoft  William_Ackman  institutional_investors  Apple  money_management  T.Boone_Pickens 
september 2013 by jerryking
Take one philanthropist plus one hedge fund - FT.com
June 2, 2013 | FT | By Emma Boyde.

the Pershing Square Foundation has announced a gift of £4.5m to Saïd Business School at Oxford university....The gift will fund up to five scholars a year on Saïd’s “1+1” programme, which allows students to study an MBA and an Oxford university specialist master’s degree in two years. The gift will be matched by a further £3m from the Oxford Graduate Scholarship Matched Fund.
philanthropy  Oxford  hedge_funds  business_schools  William_Ackman  money_management 
june 2013 by jerryking
globeadvisor.com: BILL ACKMAN
November 30, 2012
A year ago, Bill Ackman was just another American hedge fund billionaire. Then came his proxy battle against chronically underperforming CP Rail. The ensuing boardroom rout struck fear in the hearts of directors and executives across Canada, and earned Ackman our top nod for 2012 as the CEO who kicked business-as-usual squarely in the gut

JACQUIE McNISH
hedge_funds  profile  William_Ackman  Pershing_Square  money_management  shareholder_activism  boards_&_directors_&_governance  proxy-advisory 
december 2012 by jerryking
Clear the track
JULY/AUGUST 2012 | REPORT ON BUSINESS | DEREK DECLOET
William_Ackman  CP  CN  hedge_funds  railways 
september 2012 by jerryking
Ackman unimpressed with CP’s results - The Globe and Mail
BRENT JANG AND JACQUIE McNISH
From Tuesday's Globe and Mail
Published Monday, Apr. 23, 2012
William_Ackman  CP  CN  hedge_funds  railways 
april 2012 by jerryking
Investors Make Changes at Burger King Ahead of Listing - WSJ.com
April 4, 2012 | WSJ | By PAUL ZIOBRO.
Quick Changes at Burger King
Investors Who Reshaped Restaurant Chain's Menu, Management, Now Plan to List Shares on Market
hedge_funds  Burger_King  William_Ackman  investors  franchising 
april 2012 by jerryking
America's Export to Canada: Shareholder Activism - NYTimes.com
February 14, 2012, 7:16 pm Hedge Funds | Deal Professor
America’s Export to Canada: Shareholder Activism
By STEVEN M. DAVIDOFF
William_Ackman  hedge_funds  shareholder_activism  railways 
february 2012 by jerryking
Bill Ackman's Soft Power
February 10, 2011 | BusinessWeek | By Devin Leonard. The
hedge fund manager is an open, friendly, talkative guy who makes a lot
of companies—MBIA, Target, etc.—miserable
William_Ackman  short_selling  hedge_funds  shareholder_activism  personal_chemistry 
february 2011 by jerryking

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