Nelson Peltz: The Ultimate Activist Investor
The term “activist investor” can conjure up a number of connotations, but the common thread would be the idea of effecting change in companies, hopefully with an eye towards positive reform. Mr. Nelson Peltz has earned his reputation in the domain of activist investing, to the point of redefining its meaning and purpose.
Born in 1942 in Brooklyn, New York, Nelson Peltz dropped out of the University of Pennsylvania’s Wharton School with the intention of becoming a ski instructor in Oregon. This was not to be his destiny, however, as Mr. Peltz began his business career in 1963 when he joined his family’s food business.
In April of 1983, and his business partner, Peter May, bought a stake in vending-machine and wire company Triangle Industries Inc. with the idea of using it to make acquisitions, building it into a Fortune 100 industrial company and the largest packaging company in the world.
Nelson Peltz gained credibility among the institutional investor class, along with his reputation as an activist investor par excellence, following his acquisition and turnaround of Snapple Beverage Group in the late 1990s. In 2005, Mr. Peltz co-founded Trian Fund Management LLC, his well-known activist investing firm.
Trian has invested in such companies as Heinz, Cadbury, Kraft, Wendy’s, PepsiCo, and Family Dollar; the firm has had an influence on each of these companies’ management and operations. For instance, in 2006, Trian was involved in a proxy contest with Heinz to get five independent directors on their board; Trian succeeded in getting two members on the board, including Nelson Peltz.
These are not hostile takeovers, however, and the endgame is ultimately to effect positive change. In reference to Trian, Nelson Peltz has said, “We invest with a detailed set of operating and strategic initiatives to grow the top line and achieve best-in-class margins.” Furthermore, “We ask the leadership of the companies that we invest in to act like they own 100% of the company. We think this approach leads to attractive returns for all shareholders.”
Today, 76-year-old Nelson Peltz, and Trian, which manages around $10.8 billion in assets, have put themselves in a league of their own as activist investors. Mr. Peltz’s willingness to go after mega-cap firms in order to make fundamental changes and add value to shareholders and the company itself is, in large part, the reason for his imposing stature in the financial community.
Along with his role at Trian, Mr. Peltz serves as the non-executive Chairman of The Wendy’s Company. Nelson Peltz is also a director of The Procter & Gamble Company, Sysco Corporation, and The Madison Square Garden Company.
Even with the firm’s past accomplishments and established reputation, Trian Fund Management continues to operate as a “highly engaged shareholder.” As a non-hostile activist firm, Trian strives to work collaboratively with management teams and boards in order to drive long-term sustainable earnings growth for the benefit of all shareholders.