The chairman of Third Point Investors Ltd, a London-based hedge fund linked to Dan Loeb’s activist group, has resigned after he received “personal threats” amid the escalating battle. ladder with rebellious investors.
Steve Bates, a former US equities analyst and JPMorgan executive who has held the chairman’s chair since 2019, decided that “circumstances have made his continuation as director of the company unacceptable,” a statement from the board said on Thursday.
The decision follows meetings between TPIL and activist investors Asset Value Investors and Staude Capital. AVI owns about 10% of the listed vehicles and is the largest shareholder behind Loeb.
Bates’ departure marks the latest turning point in a battle of words between Loeb, one of the world’s most hardened activists, against a dissident group of shareholders. On Thursday, Loeb called the activists “a stain on institutional investors” and said their “underage antics are desperation and inexperience.”
Tom Treanor, AVI director, said in a statement to the Financial Times that it was “regrettable” that Bates had stepped down but it was “not surprising at all”. He pointed out Bates is “under pressure from management” and what he considers “false stories given in the name of the board”.
TPIL is a £650 million closed-end fund listed on the London Stock Exchange and invested directly in Third Point’s flagship hedge fund, which manages approximately $20 billion in assets. There has been talk for some time about the valuation discount between the main fund and the London-listed feeder fund.
Loeb is known for the tough tactics he has taken in battles between activists and the public companies he has invested in, most recently Royal Dutch Shell. Third Point has built a large stake in the super oil tanker and calls it break up yourself.
But at the UK-listed investment vehicle, Loeb is facing a taste of his own medicine. As of May, London-based AVI is worth £1.2 billion publicly criticized TPIL’s operations, governance and measures to lock in discounts with hedge funds.
Loeb scored a win this month when he won a key shareholder vote defeating a proposal backed by AVI and another investor Staude Capital, removing Third Point general counsel Josh Targoff from TPIL’s board of directors. . Shareholders also voted in favor of an exchange mechanism designed to help reduce discounts.
AVI’s Treanor said the claim that shareholders dismissed its offer as an intervention by activists “is a complete deviation from reality”. It was only defeated by “votes controlled by the ‘VoteCo’ organization that owns no economic shares in the company,” he said. “This raises serious questions around corporate governance.”
Since the vote, TPIL has engaged privately with representatives of AVI and Staude Capital, it said on Thursday. On the corporate side, these face-to-face meetings involve Bates and an advisor.
An activist in one of these meetings issued “personal threats” to Bates, saying that if he refused to “join their proposals, they would attack him during the meetings.” other business areas,” the TPIL statement said. “This naturally creates a business conflict for Mr. Bates.”
TPIL director Rupert Dorey said: “The board is appalled that Steve has been placed in a position where he has decided to leave the board, but understands his reasons for doing so.”
“I regret leaving the board, but I have recently been placed in a position where I cannot continue as TPIL director,” Bates said.
Loeb criticized his opponent’s tactics. “The conduct of these so-called ‘activists’ is a stain on institutional investors who attempt to engage constructively with the association,” he said in a statement on Thursday. board of directors and management team. To be a successful activist, you need to move on when shareholders reject your plan instead of resorting to tactic of innuendo. These juvenile antics are filled with despair and inexperience. “