Some U.S. activists post double-digit gains but many nurse losses

BOSTON A handful of corporate agitators pushing for change at companies scored double-digit returns in the first half of 2020, but panic selling and bargain hunting left the average activist investor nursing big losses.

Several experienced activists and newer managers reported a surge in returns even as the coronavirus outbreak led economic production to collapse and sent unemployment rates soaring.

William Ackman’s Pershing Square Capital Management gained 35% while Jason Aintabi’s Blackwells Capital climbed 27% and Glenn Welling’s Engaged Capital returned 17% in the first seven months of the year, investors said. Representatives of the funds declined to comment.

For Ackman and Welling, 2020 marks a continuation of strong returns in 2019, which was a banner year for activists overall after a disappointing 2018 when a late year stock market rout left many activists with losses.

Starboard Value, one of this year’s busiest corporate agitators, returned 8.6% in the first half of the year, an investor said. The firm, which launched three campaigns for change during the first half of the year, won eight board seats in a proxy fight at GCP Applied Technologies.

More broadly, the average activist nursed a 14% loss in the first six months of 2020, according to Hedge Fund Research data. That compares with a 3.5 drop for the average hedge fund, a category that includes those focused on technology and healthcare investing that have performed well this year.

Some activists snapped up bargains after the sell-off, including Pershing Square which added to its holdings of Lowe’s. Others saw positions in financial, food and retail and industrial conglomerate stocks drop as the pandemic reshaped the world.

Legion Partners lost 3.8%, Third Point’s Offshore Fund lost 7.3% and Trian Fund Management lost 13% in the first half, investors said. Trian’s concentrated porfolio includes Sysco, which fell 37% this year.

Representatives for the firms declined to comment.

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