Rosenstein's JANA promotes Ostfeld to joint managing partner amid strong returns - letter

Laboratory of America Holdings

07/02/2023 16:30

By Svea Herbst-Bayliss
       NEW YORK, Feb 7 (Reuters) - Activist investor JANA
Partners LLC, which has flexed its muscle at household names
including Whole Foods and Freshpet  FRPT.O , is promoting a
veteran of the firm to joint managing partner after having
delivered years of market-beating returns.
    Barry Rosenstein, 64, told investors on Tuesday that Scott
Ostfeld, 46, who has spent over a decade spearheading JANA's
activist investments, has been named to managing partner
alongside Rosenstein, according to a letter reviewed by Reuters.
Rosenstein, who founded the firm in 2001, has been its sole
managing partner for decades. 
    "Scott has been instrumental in generating our returns and
leading our activist strategy," Rosenstein wrote, adding that
Ostfeld has sat on several boards and recruited many executives
who have partnered with JANA on investments.
    Ostfeld, who earned undergraduate, law and business degrees
from Columbia, joined Rosenstein 17 years ago.
    Four years ago, JANA closed its event-driven funds to
concentrate exclusively on activism, a decision which has paid
off for the firm. According to the letter, JANA's Benchmark
Series A fund generated returns of a net annualized 14% a year
over the last five years, beating the S&P 500 by a cumulative
net 34%.
    The letter also noted that JANA's Drawdown fund, launched in
2010, has generated a net return of 17%, and that the firm will
be launching a new Benchmark share class later this year in
response to investor interest.
    Rosenstein said the firm intends to close the funds at $2.5
billion to $3 billion in assets. Jana currently oversees $1.5
billion.
    The change at JANA Partners comes as 2023 has gotten off to
a busy start for the activist investor industry. Nelson Peltz'
Trian Fund Management is pushing for a board seat at Walt Disney
Corp  DIS.N , and four activists - Elliott Management, Inclusive
Capital Partners, Starboard Value and ValueAct Capital - are
pressing for changes at Salesforce  CRM.N .
    Additionally, new regulations which ushered in the use of a
so-called 'Universal Proxy Card' is expected to make for a
busier season.
    Over the years in contests that included pushing for changes
at Tiffany & Co, Conagra Brands  CRM.N , Vonage  VG.O , and
Labcorp  LH.N , JANA Partners established itself as a firm that
stays out of the limelight, offers constructive advice to
management and won four board seats in 2022, alone.
    Rosenstein has no plans to retire any time soon.
    But by promoting Ostfeld, a new chapter is opened for JANA
Partners at a time many other prominent activists are searching
for ways to pass the baton to the next generation.
    Bill Ackman said last year that he appointed Ryan Israel as
chief investment officer at Pershing Square Capital Management,
a first for the firm. Meanwhile Nelson Peltz, 80, named his son,
Matthew, as his alternate nominee in his boardroom challenge at
Disney, a regulatory filing shows.
 (Reporting by Svea Herbst-Bayliss; Editing by Kenneth Maxwell)
 ((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))