Third Point Investors CEO Dan Loeb
(Picture: Third Point)An extraordinary row between Third Point Investors and disgruntled shareholders escalated today as a second backer broke cover to blast management.
Miles Staude of Staude Capital published an open letter to fellow shareholders accusing Third Point of “Trumpian theatre” and slack corporate governance. He has been lobbying behind the scenes for months.
In his letter, Staude accused New York hedge fund boss Dan Loeb, who manages Third Point’s money, of exploiting the structures of its UK feeder fund to railroad through approval of director Joshua Targoff in a vote last month.
Staude supported a vote on Targoff’s position as a proxy for proposed changes to how the fund was managed. The motion was defeated but Staude argues this was only thanks to support from a supposedly neutral voting bloc meant to safeguard the fund from US jurisdiction .
Staude claims the bloc was influenced by Loeb and accused him of using it as “a backdoor route for US corporate governance practices to make their way into the London market”. He dubbed it “shameful.”
A spokesperson said Third Point “strongly refutes” any claim Loeb influenced the voting bloc. Shareholder advisory groups Glass Lewis and ISS both backed Targoff ahead of the vote.
Staude is the second Third Point investor to publicly blast governance. Asset Value Investors has led a loud campaign for change for months.
The pair are upset by the gulf in value between Third Point’s assets and its share price. They are pushing for a new mechanism to address the discount. Third Point, which is known for its own activist campaigns and is currently targeting Shell, insists it is tackling the issue with plans of its own.
Third Point chair Steve Bates quit unexpectedly last month. The fund claimed activists made threats against him that made his position untenable and Loeb said the activists targeting Third Point were “juvenile”.
Staude refuted the claim in his letter, saying: “Did we challenge the TPIL directors to a meeting behind the school toilets at recess? Did we threaten to avail ourselves of their lunch money? No.
“We made the plain case that, within the UK, directors would be held accountable for their corporate governance track records, and that if the directors were to ignore the wishes of their ordinary shareholders, we would shine a bright light on their behaviour.”
Staude publicly challenged three remaining board members to respond to his accusations, saying there had been a “deafening silence from the directors.”
Not all investors are in opposition to management. John Armitage of Egerton Capital, Third Point Investors’ third largest shareholder, said: “Dan Loeb and his team are great investors and TPIL is a super, tax-efficient, simple vehicle for UK investors.
“As an owner of TPIL, I am satisfied both with the steps the Board has taken on discount control and with performance, and believe that shareholders who are unsatisfied should sell their positions rather than distract the company by their futile stunts.”
