Activists Target Nelson Peltz’s Trian Over U.K. Fund

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A group of investors, including two companies that were Mr Peltz’s targets, are calling for a change to the London-listed investment vehicle.

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The campaign is a rare example of an activist investor playbook aimed at one of its highest-profile practitioners. Nelson Peltz, who co-founded Tryon Fund Management, often takes stakes in companies, seeking board seats and agitating for a change in strategy that will result in larger dividends for shareholders, including his firm. is included. In 2017, he launched a campaign against consumer-goods giant Procter & Gamble Co.,

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That at the time was the largest and most expensive proxy fight in history.

Investor in London-listed Troian Investors 1 Limited,

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They look forward to “achieving an acceptable standard of governance and restoring the confidence and confidence of independent shareholders”, they said in a declaration outlining their grievances.

The fund has a market capitalization of approximately $350 million, which is less than the net asset value of approximately $500 million calculated by the company as of May 31. The fund’s investments include shares in consumer-products company Unilever Plc.,

A recent target of Mr. Peltz’s firm. Unilever said last month it would appoint Mr Peltz to its board.

In a securities filing Monday, Trian Investors 1 said its board believes it has acted responsibly and is reviewing investors’ requests to hold a meeting and revamp the board. . The company said the board welcomes the inputs and views of all stakeholders. A subsidiary of Trian Fund Management acts as the investment manager for the listed fund.

Tryon is getting a taste of its own medicine from Invesco and Janus Henderson, two asset-management companies in which Tryon holds a stake.

When Trian Investors 1 was first listed in London in September 2018, it planned to invest in an underperforming listed company, drive change, exit investments and return capital to shareholders. Last year, the investment manager and the company’s board proposed changes to the investment policy. Trian will be able to make multiple investments at the same time; buying a majority stake; buying stake in private companies; And reinvest capital after exit instead of distributing profits to shareholders.

The resolution passed 52% to 48% last June. Investors say the proposals only scuttled through because the fund, owned by Trianon, teamed up with investment bank Jefferies Financial Group Inc.,

, at the time owned about 29% of the company and voted in favor. Investors say Jefferies had a conflict of interest because of its relationship with Tryon.

A representative for Jefferies could not immediately be contacted for comment.

The investors want to remove three directors from the board and nominate one independent director and one director to represent the group in their place, in addition to convening an extraordinary general meeting.

Investors claim that Tryon had a conflict of interest because of financial gains that could have been forfeited as a result of a change in investment policy. Investors say the company’s board should have considered how the policy change would affect investors who want to exit and should now sell shares at a “significant discount” to the company’s underlying net asset value .

Aegon Asset Management UK plc also supports the proposals. Voting shares represent approximately 44% of the fund seeking change.

Since its first trading day, the fund is up about 13%, though it is down more than 20% so far this year. Shares fell nearly 2 per cent on Monday. Shares are rarely traded, and this year has had a long extension where no shares are traded out of hand.

Mr Peltz is not the first shareholder activist to have faced the ire of his own UK investors. Dan Loeb’s listed London vehicle was also the subject of attacks from shareholder activists, who wanted to reduce the discount at which shares traded on their underlying net asset value. Global Value Fund also participated in that campaign.

The fund eventually agreed to appoint an independent director who was proposed by the shareholders and ended its operation.

Write to Julie Steinberg at [email protected]

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