ETF News

Some U.S. activists post double-digit gains but many nurse losses

BOSTON, Aug 4 (Reuters) - A handful of corporate agitators pushing for change at companies scored double-digit returns in the first half of 2020, but panic selling and bargain hunting left the average activist investor nursing big losses.

Several experienced activists and newer managers reported a surge in returns even as the coronavirus outbreak led economic production to collapse and sent unemployment rates soaring.

William Ackman’s Pershing Square Capital Management gained 35% while Jason Aintabi’s Blackwells Capital climbed 27% and Glenn Welling’s Engaged Capital returned 17% in the first seven months of the year, investors said. Representatives of the funds declined to comment.

For Ackman and Welling, 2020 marks a continuation of strong returns in 2019, which was a banner year for activists overall after a disappointing 2018 when a late year stock market rout left many activists with losses.

Starboard Value, one of this year’s busiest corporate agitators, returned 8.6% in the first half of the year, an investor said. The firm, which launched three campaigns for change during the first half of the year, won eight board seats in a proxy fight at GCP Applied Technologies.

More broadly, the average activist nursed a 14% loss in the first six months of 2020, according to Hedge Fund Research data. That compares with a 3.5 drop for the average hedge fund, a category that includes those focused on technology and healthcare investing that have performed well this year.

Some activists snapped up bargains after the sell-off, including Pershing Square which added to its holdings of Lowe’s . Others saw positions in financial, food and retail and industrial conglomerate stocks drop as the pandemic reshaped the world.

Legion Partners lost 3.8%, Third Point’s Offshore Fund lost 7.3% and Trian Fund Management lost 13% in the first half, investors said. Trian’s concentrated porfolio includes Sysco, which fell 37% this year.

Representatives for the firms declined to comment. (Reporting by Svea Herbst-Bayliss; Editing by Tom Brown)