Morning Brief: Starboard Takes Swipe at Carl Icahn

Jeffrey Smith’s Starboard Value openly criticized octogenarian activist investor Carl Icahn in its proxy battle with Newell Brands. In a new regulatory filing, Starboard, which has nominated four directors to the consumer products company’s board, criticizes the company for entering into “a hastily constructed and clearly suboptimal ‘cooperation’ agreement to hand over almost half of the Board to Carl Icahn.”

Starboard accuses Icahn of failing to enact “the right change” at Newell, asserting that he chose to place three of his direct representatives on the board and two other “’independent’” directors, noting that one of the directors has no public board experience and graduated from the same college in the same year as Brett Icahn, a Newell director appointed by Icahn.

“Make no mistake — this agreement was clearly a desperate attempt to hand outsized influence to one shareholder in order to entrench management and disenfranchise shareholders,” Starboard insists. “The company was hoping this ‘cooperation’ agreement would be enough to placate the shareholders by arguing that it represented meaningful change.”

Starboard is urging shareholders to elect its four nominees — Pauline Brown, Gerardo Lopez, Bridget Ryan Berman, and Robert Steel — in place of three of the five directors selected by Icahn as well as Michael Todman, the former chairman of the nominating/governance committee. Two of those three directors are Icahn employees, while the third is an alleged friend of Brett Icahn.

“We believe the changes we are proposing will not only create a better functioning Board with the most qualified and diverse directors, but will also prevent a ‘voting bloc’ of handpicked directors by Carl Icahn,” Starboard adds.

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Sol Kumin’s Folger Hill Asset Management is merging with Schonfeld Strategic Advisors, according to Business Insider. Schonfeld is mostly interested in Folger Hill’s Asia fund, according to a person with knowledge of the situation. We reported in 2016 that Schonfeld invested $500 million in Folger Hill Asia fund. Kumin, who was formerly head of new business and recruitment at Steven Cohen’s SAC Capital, will become chief strategic officer at Leucadia Asset Management, which backed Folger Hill, a Reuters report noted. One of Folger Hill’s class of funds was barely profitable last year after losing money in 2016, according to people familiar with its results. Schonfeld currently manages about $20 billion.

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BlueMountain Capital Management appointed Sanket Patel as portfolio manager of global energy equity investments. He was previously a portfolio manager with Alyeska Investment Group specializing in energy. He is also a Tiger Grandcub, having previously worked at Chris Shumway’s Shumway Capital. “We are expanding our equities business, which will eventually have a larger portion of assets under management, as part of our broader investment strategies,” said Stephen Siderow, co-founder and co-president of BlueMountain. The firm manages more than $21 billion in assets.

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Bill Ackman’s Pershing Square Holdings is down very slightly for the first 10 days of April. For the year it is off by 8.7 percent.