Trian Partners has been having a rough year, in part due to Covid-19.
The activist hedge fund firm’s main hedge fund lost a little more than 13 percent for the first half of the year, according to an investor.
About half of the loss is due to its stake in industrial food distributor Sysco — its largest investment, accounting for nearly 30 percent of U.S. common stock assets, according to an investor and regulatory filings. Sysco’s stock dropped nearly 40 percent in the first half of the year, after plunging as much as 63 percent during the spring market meltdown.
Sysco has taken a beating from the pandemic, since its large markets include restaurants, colleges and other large food operations, including cruise ships, which have shut down or sharply curtailed operations since March, said the Trian investor.
Trian — headed by Nelson Peltz, Peter May, and Edward Garden — is known for running a highly concentrated portfolio. It only held seven individual U.S. stocks at the end of the second quarter, valued at $4.8 billion, down from $6.9 billion the previous three-month period, according to its quarterly 13F regulatory filings.
At year-end Trian had managed a total of $11 billion, according to a separate regulatory filing. However, at the end of June it managed $6.75 billion. It also had $1.4 billion in callable commitments, according to the investor, for a total of $8.15 billion.
Besides performance, the biggest reason assets declined was the result of its sale of more than $2 billion in shares of Procter & Gamble. The reduction in its P&G holdings was primarily the result of sales of shares held by a fund managed by Trian that has a multi-year lockup period that expires this year, according to a statement provided by Trian.
Trian still owns more than 10.8 million shares of the consumer products giant, easily making it the firm’s second-largest U.S. position. And Peltz remains on the board.
“Trian is very pleased with its investment,” the hedge fund said in its statement.
Altogether, Sysco and P&G accounted for more than half of the U.S. common stock assets as of the end of June, according to a regulatory filing. Long-time holdings Mondelez International and Wendys also remain major investments.
In the second quarter Trian also sold its entire stake of Legg Mason in advance of the asset manager’s acquisition by Franklin Templeton, which was completed in early August.
Also in the second quarter, Trian sold more than half of its stake in Bank of New York. Garden had stepped down from the banking giant’s board of directors in June 2019.
Not included in the 13F is Trian’s large stake in British plumbing company Ferguson. It disclosed holding a 6.1 percent stake last year.
On November 14 Trian published a 23 page report laying out why it thinks the company is way undervalued. Since then the stock has risen about 11 percent, despite nearly halving in price during the global stock market collapse in March.
