Activist shareholder Nelson Peltz in spat with rebel investors

A London-listed fund linked to Nelson Peltz’s Trian Fund Management has come under pressure from a group of rebel investors seeking to restructure its board “to improve governance and restore trust”.

Peltz, known for opposing management at companies including consumer goods group Unilever and asset manager Janus Henderson, found himself the target of investors demanding changes to his Trian Investors 1 fund.

An extraordinary general meeting has been called by an investor committee comprising asset managers Global Value Fund, Invesco, Janus Henderson Investors UK Limited and hedge fund Pelham Capital.

It is seeking to remove board members Chris Sherwell, Simon Holden and Anita Rival and nominate two new directors: independent director Robert Legget and Global Value Fund portfolio manager and committee representative Miles Staude.

The committee and Aegon Asset Management, which has said it will support the proposals, control 43.6 percent of the fund’s voting share capital.

Janus Henderson Fund’s involvement in activist groups puts the U.S. asset manager in a delicate position as Peltz has been pushing for sweeping changes to the company and February won a board seat.

Investor criticism centered on changes to the company’s investment management arrangements with Trian at last June’s annual general meeting.

When Trian Investors 1 went public in September 2018, it began investing in a single, publicly listed target, working to improve the business, before exiting investments and returning capital to shareholders. This model is similar to that employed by Edward Bramson’s activism tool Sherborne Investors.

However, last year, ahead of its annual general meeting, Trian Fund 1’s board proposed a series of changes to its investment policy that the committee believed would benefit the manager financially. Crucially, the changes will allow it to have multiple investments at once, rather than returning all capital and profits to shareholders after exiting the investments, where managers can reinvest them.

The committee believes that the board should have consulted independent shareholders to see if the change in investment policy was supported. The change in investment policy was approved by a 52% to 48% vote last June. Trian and the company’s financial advisor, Jefferies, who own 28.6% of the company’s shares at the AGM, voted in favor of the changes.

The investor committee also expressed concerns about the appropriateness of its fee structure. It has been calculated that total returns to shareholders have been £57.6 million since the IPO, and managers have received £56.8 million in performance and management fees. But a person close to the company said it had received £12m in total fees since the IPO, mostly management fees. It will not receive any performance fees until the investment is profitable, the person added. From the IPO to the end of May, its net asset value rose 64%.

The committee also believes that Jefferies may have a conflict of interest in voting. At the time of the AGM, it was a 13.5% shareholder in the company, and the committee believed it had an advisory relationship with Trian and the company.

Trian Investors 1 said it was “reviewing the content and legality of the request for a general meeting”. The company’s board of directors said that “it has always acted in a responsible manner . Jefferies declined to comment.

It follows a 10-month public battle between a group of British shareholders and New York-based activist billionaire Dan Loeb over a policy that controls discounts at the London-listed investment trust, which Loeb owns. Feeder Fund. The main third point hedge fund.

Rebel investors led by UK fund manager Asset Value Investors reached a truce in February when Third Point agreed to appoint an independent director nominated by disgruntled shareholders. Staude of the Global Value Fund was also part of the activist group facing Loeb.

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