An interview with billionaire Hedge fund manager and activist investor, Nelson Peltz. In this interview, Nelson discusses what he looks for in companies before he makes an investment and how he has been superior over other activist investors. Nelson also talks about the lessons he has learnt from battling P&G and other companies.
Billionaire Nelson Peltz: Activist Investing, Investment Strategy And Battling P&G
Thanks Mike. Happy New Year everybody. Really great to have you here. So some of you have been. This is the fifth time I think we've done this in New York. We're trying something a little bit different tonight. First you'll see these little doo hickeys on your chairs.
These allow you to vote on a couple of panels were slides. We're going to put up so we're going ask you all to sing a little bit for your supper canopies or whatever it is we're serving you. And then you know in the past we've we've done like a big panel I thought would be really interesting to have to have someone who's kept us all on walls. Everyone on Wall Street on their toes. Not just the past year but particularly over the past year with what was amounted to the biggest proxy fight in corporate history. So it I thought would be fun to have Nelson alone in sort of an alloyed here to give us a view about a couple of things. And as you may remember last February try and fund management took a three and a half billion dollar stake in this iconic company Procter and Gamble.
By the end of the year despite a lot of opposition from the board of the maker of Pampers Tide and a big war the words some were the words that probably cost something in the order of 50 million dollars if you add it all up and some of you may have actually made some of that money. So congratulations. At the end of it all. Nelson earned a seat on the company's board. That's no mean feat especially since in the end. Actually if you look at the numbers I think marginally they had a few more votes than you did. Depends on when you stop.
Well I would say breaking we definitely argued in favor of Nelson's candidacy for the board this time around we haven't always done so. I think we took less from Rob. I guess I guess we did. We when you took when you took aim at Hine's a few years ago I think we split the baby and we sort of thought a few of your guys should go on and not all of you know well it turned out I think we were it was that right. Turned out to be the same at DuPont in all cases though we found Nelson and his colleagues that try to be thoughtful insightful and extraordinarily persistent. Think that's definitely true. So anyway please welcome Nelson Peltz. So.
Let's make this a little bit let's relax a little bit here.
I want to know how you got into how how did you become this guy who you take a stake in a company's capital and they all start shivering in the boardroom. How did how did that happen.
Well there's no need for them to shiver. I mean when you think about what we do seriously what we do is we come up with a plan to make that company better. We've never come with a plan to throw out the CEO.
We've never come with a plan to embarrass anybody. We always come with a plan that says look this is a great company. It's lost its way. Not to the last quarter or two but perhaps last decade. And we've got a plan and we think it's a good plan. And it's a plan that it warrants discussion in the boardroom with all the facts because all our work is done outside the boardroom with public information. And we think it's where it warrants a discussion and how this company should be structured priced how they're marketing whatever the issues are. But it's not meant to be a fight. It's not meant I'm going to repeat myself to embarrass anybody or to unseat the CEO. Now unfortunately sometimes it winds up that way but that's not the objective. The objective is simply to make the company perform better and to perform better. And this is very important. To perform better on the income statement. That's where we live and breathe not the balance sheet. If we're proposing three or four more turns of leverage on a company. You don't need us. You can just hire a banker. Do that happily do that for you. We have real ideas on how sales up and expenses down.
Work your mug said. That's correct. And it says sales up on one side. Cash is king on the other cake. So whenever you come to our office we have mug and that's what it says on it and we lose thousands of them every year. People.
Well I mean how is that how does that distinguish you from say other. You call yourself an engaged shareholder. How is that different from an activist. Because we are of course shorthand in the media we say well Nelson Peltz karma activist investor why are we are we making why what's the distinction.
You know the distinction unfortunately is what the word activist has come to mean. I think it's come to mean a fight I think it's come to mean short.