Irik P. Sevin, director of Star Gas, had to “do what he does best” in 2005, according to shareholder Daniel Loeb in a letter. Which is: “Resign and retire to your waterfront home in the Hamptons, where you can play tennis and hang out with your fellow socialites.”
Over the years, American hedge fund manager Daniel Loeb (59) has become a little more polite. But with his investment company Third Point Capital, he has been the feared activist shareholder among board chairmen for decades.
On Wednesday evening it turned out that he is targeting the British-Dutch oil and gas group Shell. According to Loeb, this can be divided much better into an ‘old’ part that focuses on oil and gas, and a ‘new’ part that focuses on sustainable energy. Shell wants too much everyone please, says Loeb, but actually has to choose much harder.
With Loeb’s involvement, Shell can now join a long line of companies, including Nestlé, Sony, Sotheby’s, DSM and Yahoo. There too, this ‘master of the universe’, the Wall Street nickname for the handful of investors who is particularly influential, came forward.
Student of Obama
The origins of his career, according to Loeb, lie in his Californian childhood: as the cousin of businesswoman Ruth Handler, creator of the Barbie and founder of toy company Mattel, he would already have associated toys with doing business and making money.
After studying at Columbia University in New York – Loeb was a classmate of Barack Obama here – and a career of several years in banks and private equity funds, he started Third Point. In his own words, the starting capital was 3.3 million dollars, which he collected through friends and family. The fund now owns 17 billion dollars (about 14.5 billion euros) in shares.
Loeb, whose private fortune is estimated at $4 billion (about 3.4 billion euros), has become known in corporate America for his aggressive and comic letters to CEOs of companies that he believes were not performing well. In the first years he was the fiercest, but also later he continued to lash out. For example, in 2013 Sotheby’s was “an old painting in need of restoration”. The auction house ran the risk of losing the battle to Christie’s, according to Loeb – himself an avid art collector.
Not successful everywhere
At Sotheby’s, Loeb competed to replace the CEO. That eventually happened. And Nestlé put the processed meats branch up for sale under pressure from the American. Loeb worked together with Jan Bennink from Groningen, former chairman of the board of food concern Numico. Loeb wanted to hang out with someone more knowledgeable about the food world.
His interference was not successful at every company. The call to split up Japanese electronics group Sony was considered by management in 2013, but was not implemented. In 2017, Loeb urged the Dutch DSM to split the food and materials division. Nothing happened then, but last year DSM still sold the materials branch.
Despite the varying success of its meddling, Third Point managed to grow by an average of 14 percent annually between 1997 and 2019. Although that was also partly due to one particularly good investment: Loeb speculated on price declines just before the internet bubble burst around 2000.
#sharp #pen #Daniel #Loeb #teasing #spirit #Shell