Allen Global Partners LP had its best year since 2010, returning 7.01% net fees, and Global Allen Partners Offshore had its best year since 2009, with 7.38% net returns, according to a letter to investors reviewed by ValueWalk.
“The Fund’s performance in 2013 was attributable to a broad range of investments across the U.S., U.K., and Europe, with the contribution from equity and credit investments relatively balanced,” the fund wrote in its fourth quarter investor letter.
More signs that shareholder activism is going mainstream
One of the recurring themes among hedge fund year-end investor letters has been the growing acceptance of shareholder activism among management teams.
“During 2013, corporate boards generally took a friendlier stance toward shareholder-led strategic initiatives by being increasingly receptive to sensible proposals aimed at enhancing shareholder returns,” said Allen Global’s letter. “These proposals were often directed at companies that have been reluctant to part with their large cash balances or that have disparate businesses with different growth prospects or capital requirements that can be separated through a spin-off, asset sale, or divestiture.”
Allen Global’s top winners and losers
Allen Global picked far more winners than losers in 2013, with twenty separate investments contributing 0.25% or more to gross performance and five that lost 0.25% or more for the year. Its five top stocks for 2013 were Macquarie Atlas Roads Limited (ASX:MQA), McCarthy & Stone Ltd., Clear Channel Communications, William Lyon Homes (NYSE:WLH), and American International Group Inc (NYSE:AIG), which contributed 4.2% to gross performance as a group. The five largest annual detractors were TNT Express NV (AMS:TNTE) (OTCMKTS:TNTEY), Ceva Logistics, Severn Trent Plc (LON:SVT) (OTCMKTS:SVTRY), Transocean LTD (NYSE:RIG), and Nuance Communications Inc. (NASDAQ:NUAN), which lost almost 2.0% as a group.
In the fourth quarter five investments contributed at least 0.25% compared to just one that lost as much. Microsoft Corporation (NASDAQ:MSFT) contributed 0.37% to fourth quarter performance, McCarthy & Stone Ltd contributed 0.43%, SunCoke Energy Partners LP (NYSE:SXCP) contributed 0.32%, Clear Channel Communications contributed 0.31%, and Lamar Advertising Co (NASDAQ:LAMR) whose stock price went up nearly 10% as the likelihood that it would get a favorable IRS ruling to become an REIT went up. The only investment to detract more than 0.25% from gross performance was Anadarko Petroleum Corporation (NYSE:APC)., which lost 0.39% last quarter due to higher than expected damages in a fraud case.