Activist hedge fund manager Nelson Peltz is very different from fellow activist William Ackman, just ask him.
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Peltz says Ackman is “very different”
Peltz is known to come from the old school that works to make changes to enhance the value of a stock price. When asked on stage if he was like Ackman, Peltz, who manages a long portfolio of nearly $5.7 billion, acknowledged he was “very different.”
“What activism is doing is what private equity used to do … because I think activists are doing this for the benefit of the people who really own the business” Peltz said at the Delivering Alpha conference in New York City.
Ken Moelis on Ackman’s short bet on Herbalife
Ken Moelis, an independent investment banker on stage with Peltz, said it is not fair to categorize Ackman’s short bet on Herbalife Ltd. (NYSE:HLF), where Ackman seems possessed to drive the value of the stock to zero, to Peltz’s efforts. Moelis said Peltz looks to improve companies by basically saying the equivalent of “your children are even better looking than you think they are,” while the attack on Herbalife is seeking to destroy value. Moelis has served as an adviser to Herbalife.
Moelis thinks the Herbalife Ltd. (NYSE:HLF) activist struggle is about character: “It’s not a due diligence issue; it’s about the character of the people and the CEO is a fair guy…”The issue with Herbalife, Moelis says, is that one person, Ackman, is saying negative things that will result in thousands of people are losing their jobs.
Peltz’s relation with Icahn
Blogger, TV commentator and author Andrew Ross Sorkin, on stage asking the questions, seemed to revel in his position as trouble maker, raising behind the scenes issues. Noting that Peltz and controversial activist hedge fund manager Carl Icahn are friends, Peltz was quick to draw distinctions.
Carl “has a different M.O.,” Peltz said, as both traders made their names in the 1980s as corporate raiders. Reminiscent of the “good old days” when “greed was good” and the original Wall Street movie dominated popular Wall Street culture, Peltz said he sees as bygone greatness at household name-brand companies, pausing to mention Heinz, for example, as he considers the role activists played. “Activists really do this for the value of the business.”
Who is an activist investor? Moelis dryly answered: “Everyone is an activist when you take out your checkbook and buy shares of a company.”