Prominent activist investors are posting record returns for 2020 despite pandemic-dampened activity

January 8, 2021

By Svea Herbst-Bayliss

BOSTON (Reuters) – Some investors, including William Ackman and Glenn Welling, who urge companies to perform better, posted record returns in 2020 as activist investors broadly withdrew demand in a year of wild and unexpected business conditions.

Ackman’s publicly traded Pershing Square Holdings fund rose 70.2%, marking the best return to date for his 16-year-old Pershing Square Capital Management and one of the best in the hedge fund industry. In 2019, the fund rose 58%, also a record.

Wellings Engaged Capital, which was founded in 2012 and is known for pushing companies like Medifast Inc and Hain Celestial Group Inc to change, posted a return of 51%. This beats the company’s previous record return from 2019, up 34%.

And Andrew Left, who has targeted companies he believes are overvalued through his work at Citron Research, told investors that his hedge fund returned 155% in 2020 after closing in 2019, the first fiscal year of the Fund that had gained 43%.

The gains reflect an activist rebound in the late year, partly due to strong gains in the stock markets. In the first eleven months of 2020, the average fund rose 6.7% after falling 27% in the first quarter, data from Hedge Fund Research shows. According to Lazard data, activist campaigns fell 20% in 2020 from the previous year.

At the third point, when Daniel Loeb featured a late-year campaign at Intel Corp, the offshore fund was up 20.6%, its best return since 2013 when it was up 26%. It did so after Loeb repositioned its portfolio and staff after a 16% loss in the first quarter.

Blackwells Capital, which is currently bidding on Monmouth Real Estate Investment Corp, gained 32% last year and was the first to report returns on its activist funds.

Falcon Edge Capital, a steady investor in blank check firms like the one founded by Ackman and Loeb, rose 43% over the past year.

Fund representatives declined to comment.

(Reporting by Svea Herbst-Bayliss in Boston; Editing by Matthew Lewis)