September 10, 2015 / 5:41 PM / in 4 years

Exclusive: Peltz's Trian fund suffers brutal August decline

NEW YORK (Reuters) - Trian Partners, the activist fund run by billionaire Nelson Peltz, fell 4.8 percent in August, according to performance information obtained by Reuters, adding to the ranks of hedge funds that have been slammed by recent stock market turbulence.

Slowing economic growth in China has ramped up volatility in stock markets and also shown that activist investors focused on individual corporate situations are not immune to broader macroeconomic forces.

In recent weeks many hedge funds and activists in particular such as William Ackman and Dan Loeb have been hammered by the wider market pullback.

Trian is no exception - of the eleven companies in its publicly disclosed stock portfolio as of June 30, eight are down for the year, as of Wednesday’s close. Those companies include chemical and crop company DuPont (DD.N) and soft drink giant PepsiCo Inc. PEP.N

(For a table of how stocks in Trian's portfolio have performed this year, click here:

Last month’s decline contributed to a 3.45 percent drop at Trian year to date although the fund could still push back into the black if markets recover between now and year-end.

Since launching in 2005, Peltz's only down year was 2008, when the financial crisis handed Trian an approximately 19 percent loss. The company's main fund has averaged annual returns of approximately 8 percent since inception compared with 7 percent annual gains in the Standard & Poor's 500 index .SPX.

Trian has logged some successes. Its 7 percent stake in food distributor Sysco Corp. (SYY.N) is sharply higher since the holding was disclosed on Aug. 14. Peltz and Josh Frank of Trian were also elected to the company’s board of directors on Aug. 20. Peltz is also set to join the board of pump and valve maker Pentair, in which Trian recently took a 7.2 percent stake, although its shares have declined more steeply than the broader market since then.

But the fund has also had some notable losses this year. Peltz’s campaign to have a slate of directors added to DuPont, formally known as E I du Pont de Nemours and Co, earlier this year was voted down by shareholders. DuPont’s shares have fallen from $75 on the morning after Peltz lost the fight to $48.24 where they were trading on Thursday.

Trian declined to comment.

Activist investors typically buy up shares of an under-valued company and push for relatively quick changes, such as stock-buybacks or divestitures and ask for management or structural improvements. Peltz is one of largest investors in the activist space at $12 billion in assets under management and callable commitments.

The investors, including Trian, were largely performing well until August. The HFRI Event Driven Activist Index was down 3.46 percent last month, and is up 0.45 percent year to date. That is better than the S&P 500 index, which has fallen about 5 percent so far this year.

Other activists that are down for the year include Ackman, one of the top hedge fund performers of 2014. He told clients earlier this month that his Pershing Square LP fund fell 7.7 percent in August, leaving it essentially flat on the year with a 0.06 percent gain.

On Monday, David Einhorn, who runs Greenlight Capital, and Loeb, who leads Third Point, said they each lost roughly 5 percent last month, while Barry Rosenstein’s Jana Partners fell 4.3 percent. Greenlight is now down nearly 14 percent for the year, one of the industry’s most high-profile losses.

Reporting by Lawrence Delevingne and Michael Flaherty in New York, Editing by Christian Plumb

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below