Yahoo Finance Activist hedge fund furious after ‘juvenile’ attack by activist investors
Fund pushing for breakup of Shell scathing about ‘underhand’ methods that led to resignation of its London-based chair
The billionaire US hedge fund boss Dan Loeb has launched a scathing attack on activist investors targeting his London-listed fund, calling them “juvenile” and “underhanded” after its chair resigned.
Loeb’s New York-based Third Point is one of the most prominent and aggressive activist hedge funds, which take stakes in companies to push for changes that they believe will make them more valuable. Loeb has tussled with companies ranging from Sony to Sotheby’s and Prudential, and he is now agitating for a break-up of Shell.
However, in an unusual twist, it is Loeb’s London fund that is now the target of activist investors, triggering an extraordinary public spat between investment firms.
Steve Bates, the chair since 2019, stepped down after claiming that he had received “personal threats” from a shareholder in a meeting who said they would “attack him in other business areas”, Third Point said.
Third Point Investors was listed in 2007 to give UK investors easy access to returns from Loeb’s main hedge fund. It had a market value £680m on Wednesday, but Asset Value Investors (AVI), the largest shareholder after Loeb with a 10% stake, says poor management meant it was undervalued compared with its holdings.
Third Point said in a statement to the stock market on Thursday that it had held meetings with AVI and other investors, including a firm called Staude Capital. It did not identify the source of the alleged threat.
Third Point said the threat raised a “business conflict” for Bates if he continued as chair.
Loeb, who is worth $4bn (£3bn) according to Forbes magazine and who has himself been criticised for his hard-driving activism, used the same stock market notice to attack his adversaries.
He said: “The behaviour by these so-called ‘activists’ is a stain on institutional investors who attempt to engage constructively with boards and management teams. Being a successful activist requires moving on when shareholders reject your plans rather than resorting to underhanded tactics. These juvenile antics smack of desperation and inexperience.”
Tom Treanor, a director at AVI, said in a statement the firm had supported Bates’s original appointment to the board, and it was “unfortunate that he has now chosen to resign”.
He claimed that Bates had “felt under pressure from the manager”, Loeb, and also accused Third Point of putting out “misleading narratives”. This included Third Point’s description of a victory earlier this month in a vote over one of the London fund’s directors that was brought by AVI.
Treanor said the vote was won only because a Third Point company controlled voting rights. He said that raised “serious questions around governance at the company”.
