This content is from: Portfolio

The Morning Brief: Nelson Peltz Has The Munchies; Starboard Gets Some Action at Wausau Paper

Nelson Peltz’s Trian Fund Management owns a stake in PepsiCo, the soft drink and snack food company, according to a news report citing a person familiar with the matter. London newspaper Telegraph first reported that Trian has been buying positions in PepsiCo and another snack food company, Mondelez International. According to regulatory filings, Trian did not own these stocks at year-end and probably has not amassed a 5 percent position, although if it was built in fewer than the most recent 10 days the fund would not yet have been required to file a disclosure.

Score one for Starboard Value. Wausau Paper announced it has agreed to sell its specialty paper business to a new company formed by private equity firm KPS Capital Partners. KPS will merge it with another paper company it agreed to acquire. Wausau has the option to own up to 25 percent of the new company, with the opportunity to earn up to an additional 5 percent interest if the new company achieves certain performance thresholds. Starboard, an activist hedge fund, recently reached a settlement with Wausau Paper, which agreed to nominate two new directors recommended by Starboard at the company’s 2013 annual meeting.

Jana Partners fired the latest salvo in its heated battle with Agrium. The hedge fund firm late Friday filed with the Securities and Exchange Commission a supplement containing a series of responses to statements made by the Canadian fertilizer company, asserting this should “put to rest new complaints made by Agrium.”

The SEC on Friday brought civil charges against a Houston-based hedge fund manager and radio personality, alleging he defrauded investors in two hedge funds. According to the regulator, George Jarkesy Jr. and his firm, John Thomas Capital Management, renamed Patriot28 LLC, worked closely with Thomas Belesis in launching two hedge funds that raised $30 million. Jarkesy inflated valuations of the funds’ assets, causing investors to pay higher management and incentive fees, the regulator says. Jarkesy is also accused of lying to investors about the identity of the funds’ auditor and prime broker.
Morever the SEC alleges that, although Jarkesy and Belesis, who calls his firm John Thomas Financial, used the same “John Thomas” name, their two firms were touted as wholly independent. “Jarkesy led investors to believe that as manager of the funds, he was solely responsible for all investment decisions,” according to the SEC. “However, Belesis sometimes supplanted Jarkesy as the decision maker and directed some investments from the hedge funds into a company in which his firm was heavily invested.” According to the complaint, Belesis at one point “angrily complained via e-mail” that Jarkesy was not steering enough money to John Thomas Financial.

Gibraltar wants to join the hedge fund party. The puny British territory is wooing Brazilian and other Latin American firms, promoting its stability, access to the European Union and favorable tax policy, which does not tax interest, dividends and capital gains.

Citadel’s Kenneth Griffin is not seeking reelection to the Board of E*Trade financial. Earlier this month, the hedge fund firm, which had been pushing the financial services firm to be sold, said it will sell its remaining 27.4 million shares, or 9.6 percent of the outstanding shares, through a secondary offering.

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