Peltz loses at Disney but his investors win; changes may still be ahead

Billionaire investor Nelson Peltz lost but he also won.

Hours after shareholders voted to keep the octogenarian hedge fund manager off the board at Walt Disney ending the year’s most expensive and closely watched board room fight, there are few signs the defeat will hurt him or his business.

“I don’t think this means anything for Nelson Peltz,” said Ken Squire, the founder of research firm 13D Monitor which tracks activists. “He was never the favorite to win a proxy fight at Disney going up against (Disney CEO) Bob Iger.”

With a personal net worth of $1.7 billion and a firm that oversees $10 billion in assets and has several winning bets in the portfolio this year, the 81-year-old manager is finding the silver lining in the loss, according to lawyers, bankers and industry analysts.

Peltz’s Trian Fund Management owns more than $3.5 billion in Disney common stock, making it the fifth-largest investor in the entertainment conglomerate. Peltz said in a statement on Wednesday that Disney had announced new operating initiatives and capital improvement plans since he launched a new round of criticism in October.

The outcome has been positive, he added, noting that Disney’s stock is up roughly 50% since October, when his firm began to re-engage with Disney, and is the best performer on the Dow Jones Industrial Average this year.

For his own investors at Trian, Peltz is delivering what they care about most – returns.

Disney gains fuel trian returns
Disney is among several winners in the Trian portfolio this year. Others include Allstate which has gained 20% since January, British plumbing and heating products distributor Ferguson PLC which is up 15% this year and food distributor Sysco which has gained 8%, people familiar with the portfolio said. Reuters