The amazing rise to prominence of activist investor Nelson Peltz

Nelson Peltz is one of the most prominent activist investors in the country today.  His reputation is the result of several decades of hard work and the development of one of the shrewdest approaches in the world of strategic activism. 

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It all started over 50 years ago when Peltz dropped out of Wharton.  While he wanted to become a ski instructor, he was forced to become a delivery truck driver for his family business.  It was perhaps providence when his father gave the younger Peltz substantial control of the business, which supplied fresh produce to New York restaurants.

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In a span of 10 years, Peltz learned the ins and outs of the business and bought a number of food companies.  In 1972, Peltz and his brother, Robert, took their company, Flagstaff Corp., public.  At the time, the business was worth $150 million.

In the ‘80s, Peltz wanted to acquire new companies and invested in Triangle Industries, a vending machine and wire company.  In less than five years, Peltz took Triangle Industries and made it a Fortune 100 industrial company, before selling it to Pechiney.

In the ‘90s, Peltz would go on to earn several more business victories, most notable of which is the acquisition of Snapple from Quaker Oats.  Peltz then sold Snapple, along with other beverage businesses to Cadbury Schweppes to open the new century. 

Jon McKee Queen is currently working with Amatex Capital, a private equity firm that pursues special situations and arbitrage opportunities in Ukraine. For more reads like this, visit this page.

What you need to know before engaging in Forex

Foreign exchange is becoming a widely popular income-generating activity.  You don’t need a stock broker to manage your transactions, and web-based applications make trading a lot easier compared to other means of investment.  But before engaging in this endeavor, take note of its many ins and outs. 

First of all, the foreign exchange market is one of the most volatile markets right now.  Prices shift every second, such that you can earn or lose money in the blink of an eye.  You have to first understand the trends before putting your money where you predict the shift will be.

Secondly, how much you make depends on how much you invest.  Don’t expect to fully replace your day job’s income during the first few months, let alone become a millionaire in your first year.  Understanding how Forex works takes time.  You have to put in the hours in terms of research, familiarizing yourself with the environment, and obtaining tools that can help you make a more informed decision.

Lastly, you shouldn’t be afraid of failure when you enter the Forex industry.  No matter how much you practice with a dummy account, not all of your trades will be successful.  Learn to stop for the day when things aren’t going your way and continue when your head is clear. 

Jon McKee Queen is currently working with Amatex Capital, a private equity firm that pursues special situations and arbitrage opportunities in Ukraine. Prior to his work with the firm, he was an honors student at Cornell, was on the Journal of International Economic Law at the University of Pennsylvania, and was the top student in the MBA program at Kyiv School of Economics. For more on Forex, visit this website.

Strategic Activism 101: A Few Examples Of Proxy Battles

While a proxy battle (or proxy fight) seems the name of a fun party game, it is anything but. Proxy battles are fierce wars for control of an organization. Most of the time, these battles are far from congenial and leave a bad taste in the mouth for people who have been dragged into them. 

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Proxy battles happen when the shareholders of a corporation disagree with how the organization is run by its directors and management. Strategic activists usually try to convince shareholders to replace management via proxy votes. As it regularly happens, shareholders who initiate proxy battles send an agent (their proxy) to vote in their stead during shareholder meetings. 

An acquiring corporation, for example, that may have gotten tired of the resistance by a company they plan to acquire may go through the proxy battle route to put in place a management team that would be more compliant.

In the 1950s, the shareholders and management of the Bank of America and the New York Central Railroad were involved in one of the highest profile proxy battles of the time. 

More recently, Hewlett-Packard (HP) experienced a proxy battle within its own management, as it attempted to take over Compaq. Opposition members of the takeover were on the losing end, and Carly Fiorina, head of management, stayed in power. The merger pushed through.

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Jon McKee Queen is an expert manager, trader, and investor currently working with private equity firm Amatex Capital. He specializes in project development, company management, corporate finance transactions and fundraisings, commodity trading, and risk quantification. To read more on activist investing, visit this page.

What Makes Activist Investment Different?

Investment usually involves committing your funds to a specific vehicle like stocks to turn a profit. Investors are very hands-off and simply monitor changes in their investments. Activist investment, however, is very far from that investment model. 

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The goal of activist investment is toward a general improvement in the well-being of people or the environment. This may sound like a sweeping statement, but the methods activist investors use are quite unique to achieve this goal. 

Activist investors buy a significant amount of shares from a company, enough for them to become major stakeholders. And once they have enough influence on the company, they then introduce changes that they would want to reflect on the company. One of the steps they take after purchasing enough shares is to become part of the board or to remove people who are not willing to comply with the changes they want to see. 

These changes vary widely. They can influence the salary margin between males and females, change company policies, introduce changes in the supply chain, push for more sustainable efforts from the company, and many more. Some activist investors simply introduce new ideas to the company after gaining influence, ideas that they see could generate value for both themselves and the company. 

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Jon McKeeQueen is an expert manager, trader, and investor currently working with private equity firm Amatex Capital, which was founded in 2015 with the goal to explore unique investment and arbitrage opportunities in Ukraine. Jon specializes in project development, company management, corporate finance transactions and fundraisings, commodity trading, and risk quantification. For more articles on activist investing, visit this blog.

Effecting Turnarounds Through Activist Investing

The current trend in activist investing was spearheaded by hedge funds some time in 2015 and is fast becoming a prominent feature of today’s business environment. Investors with controlling percentages of companies are now emboldened to take a more proactive response to company policies, when they believe the enterprise is underperforming.

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Although not without its risks, this strategy of exerting influence on company policies may be just what the company needs to increase shareholder value. In extreme cases, such intervention could effect drastic change, such as the replacement of a company’s board of directors and other members of management. But this extent of influence is rarely recommended. 

The most famous way that an activist investor could effect positive change in a company’s fortunes is by creating pressure on the management and swaying their decision-making. In many instances, this could be beneficial, allowing actions leading to an increase in shareholder value. 

At the core of facilitating change is a different perspective on issues. One of the reasons for underperformance could be that some executives had become set in their ways after making rarely-questioned decisions, which may not always bring value to a business. The pressure from activist investors forces them to think beyond this rut and focus instead on avoiding gaps and missed opportunities. 

Activist investors, however, should be wary of the steps they take when exerting influence on a company. Although investors may have novel concepts and perspectives on their side, flying blind comes with risks. Members of the management are often the most knowledgeable about the way the business is run. Thus, in most cases, effecting meaningful positive change within the company requires working closely with the management to understand the context of the problems. 

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Jon McKee Queen currently works for private equity firm Amatex Capital, which specializes in finding investment and arbitrage opportunities in Ukraine. For more on making significant investments in portfolio companies, visit this blog.

What’s The Difference Between An Activist Investor And a Hedge Fund?

In the world of investment, one could easily mistake an activist investor and a hedge fund, and with good reason. Here is the difference between the two.

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An activist investor may be an individual or a group that buys a significant amount of shares from a company to become a stakeholder. The activism comes in when the investor gains influence in the company and uses that influence to initiate change.

The activist investor can influence change by amending the company’s corporate governance policies. By doing so, they can then follow their agenda, may it be changes in executive compensation plans, improvements in supply chain management, or push efforts toward sustainability. The changes, of course, will benefit everyone in the company.

A hedge fund is a lightly regulated private investment fund that may use unconventional methods to create huge return margins in any market. One of the strategies commonly used by hedge funds is the use of tax shelters.

Hedge funds are typically structured as limited partnerships and limited investment to the business. Although they are seen as shady in the investment community, checks and balances have been placed by the Securities and Exchange Commission. These regulations make it possible for anyone to take a look at the hedge fund’s activities.

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Jon McKee Queen is currently working with Amatex Capital, a private equity firm that pursues special situations and arbitrage opportunities in Ukraine. Jon specializes in project development, company management, corporate finance transactions and fundraisings, commodity trading, and risk quantification. For more information on activist investing, follow this Twitter page.

The Pros And Cons Of Activist Investing

Activist investing has been a strategy of a number of shareholders to amass power in a company. They buy stock and look for ways to replace management. Billionaire Carl Icahn is one of the most famous activist investors today.

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There are naturally pros and cons to activist investing. Below are some of them.

PROS

Activist investors control management.

Shareholders normally don’t have that much on an influence on management. As such, the direction of the company isn’t really in the hands of shareholders. Activist investment means that investors can see their vision of the company come to fruition. Management has the choice to either follow them or be replaced.

Activist investors bring in new ideas.

New investors can come in and shake up the entire company with new ideas. While traditional practices will still be observed (for the most part), activist investors may have ideas that could lead to the expansion and growth of the company.

CONS

There might be problems when it comes to selling.

There are times when activist investors buy huge amounts of stock. This may drive up the share price. But when the time comes to sell the shares, the precedent increase may result in a plummeting of stock prices.

Activist investors prioritize themselves.

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Many firms have fallen into the trap of allowing activist investors to buy huge stocks and expect something in return, or perhaps a natural concern for the company. But because of the huge amount of investment activist investors pay for, what they expect is to get back the investment at any cost.

Jon McKee Queen is an expert manager, trader, and investor currently working with private equity firm Amatex Capital. The firm was founded in 2015 with the goal to explore unique investment and arbitrage opportunities in Ukraine. The team has experts in corporate finance, investment banking, and legal matters with decades of experience in Ukraine. Amatex Capital practices the American-style investment strategy of 'activist investing' that brings about significant improvements to the assets in which they invest. For similar reads, visit this blog.