Atlantic Investments (AUM: $1.8 billion), founded by Alexander Roepers, did well in most of its funds in last year. The newly founded Cambrian Global (long only) fund gained 15.9 percent last year while its counterparts Cambrian Europe and Cambrian Japan were up 40.8 percent and 15 percent respectively.
The flagship Cambrian Fund, a U.S. long only platform, gained a modest 8 percent while AJR/Quest, a US Long/Short Equity hedge fund, managed a +3.8 percent. The Cambrian Funds have returned 3286 percent since its inception.
The Electron Global Fund was up 2% for September, bringing its third-quarter return to -1.7% and its year-to-date return to 8.5%. Meanwhile, the MSCI World Utilities Index was down 7.2% for September, 1.7% for the third quarter and 3.3% year to date. The S&P 500 was down 4.8% for September, up 0.2% for the third Read More
Roepers’ approach of constructive shareholder activism returned profits in its top long positions. Being the largest shareholder at Owens-Illinois, Inc. (NYSE:OI), the fund was able to make some corrective changes to the company and the efforts payed off in terms of improved share value.
Atlantic is also one of the largest shareholders at Energizer Holdings, Inc. (NYSE:ENR), the position was profitable last year. Ashland Inc. (NYSE:ASH) was another gaining position last year, which benefited from the finalizing of a acquisition deal. However, Roepers thinks that the company can do better if it divests off the water division.
Rockwood Holdings, Inc. (NYSE:ROC) was another target of Atlantic’s activism, here Roepers campaigned for dividend payment, exit from the titanium dioxide business, share buybacks and the payment of company debt. The firm was successful on most of these fronts while the closure or sell off of titanium dioxide business is set to happen in this year. Other profitable U.S. equities were Kennametal Inc. (NYSE:KMT), Flowserve Corporation (NYSE:FLS), Solutia Inc. (NYSE:SOA), Harman International Industries Inc./DE/ (NYSE:HAR) and TRW Automotive Holdings Corp. (NYSE:TRW). Atlantic detracted in short portfolio and also in long Joy Global Inc. (NYSE:JOY).
Among foreign assets, Atlantic has been particularly active in convincing Atos SA (EPA:ATO), French tech company to divest from its payment processing unit. Atos was also a profitable long position of upcoming hedge fund, Permian Investment Partners.
Roepers has also been active in Swiss chemicals company Clariant which has a flourishing business in emerging markets. Atlantic believes that the company can benefit from a spin off of its textiles unit and also from cost restructuring at several plants. Notably Atlantic’s portfolio detracted its long investment in Dutch company, FLSmidth & Co. A/S (CPH:FLS). The position was discussed in the Value Investing Congress 2012 and was among Roepers’ favorite stock picks. FLSmidth & Co. A/S (CPH:FLS) is a shorting favorite in Denmark with famous investors like David Einhorn and D.E Shaw owning a stake there, get a full list of positions here.
French automotive company Valeo SA (EPA:FR), Japanese Daikin Industries, Ltd. (TYO:6367), Prysmian SpA (BIT:PRY) and MTU Aero Engines Holdings AG (ETR:MTX) were also significant contributors to Atlantic’s global portfolio. Most of these positions have been closed, Atlantic now has new investments in Securitas AB (STO:SECU-B), Lanxess AG (ETR:LXS), Saipem SpA (BIT:SPM), Trelleborg AB (STO:TREL-B).
Atlantic was also profitable in several Japanese equities, going forward it is maintaining positions in Nomura Holdings, Inc. (TYO:8604), Kuraray Co Ltd (TYO:3405), SECOM CO., LTD. (TYO:9735), Kurita Water Industries Ltd. (TYO:6370) and KOITO MANUFACTURING CO., LTD. (TYO:7276).
In team changes, Jennifer Cahill from Protege Partners joins Atlantic as Chief Marketing Officer towards the mid of February