Activist investor Mick McGuire of Marcato Capital Management on Tuesday sent a letter to the lead director of Bank of New York Mellon Corp (NYSE:BK) demanding the ouster and replacement of the company’s Chairman and CEO, Gerald Hassel, according to a CNBC report. The investor considers this move necessary to drive change in Bank of New York’s operations, priorities and brand management, the source added. Bank of New York represents the largest holding in Marcato’s equity portfolio, according to the fund’s latest 13F filing.
A former employee of notorious activist Bill Ackman’s Pershing Square, Mick McGuire himself has become a big player when it comes to activism and currently manages around $3.0 billion in equities. In the recent past, he has been engaged with companies like Sothebys (NYSE:BID), Lear Corporation (NYSE:LEA), and Life Time Fitness, Inc. (NYSE:LTM). Moreover, Mr. McGuire has been one of the best performing activists in the last couple of months, with Marcato’s main fund returning almost 9% in February. Bank of New York Mellon and Lear Corporation, which were two of the largest positions in the fund’s equity portfolio at the end of 2014 have had a strong performance in the last 52 weeks, gaining around 20% each.
As it has been already mentioned, Bank of New York Mellon Corp (NYSE:BK) represents the largest position in terms of value as of the end of 2014. The fund disclosed holding 18.0 million shares, valued at $730.32 million. Mr. McGuire initiated a stake with 17.78 million shares during the fourth quarter and since the position currently amasses around 1.60% of Bank of New York Mellon Corp (NYSE:BK)’s common stock, the investor had not yet disclosed any particular intentions up until now. According to CNBC, Mr. McGuire in his recent letter stated that Bank of New York is not likely to achieve significant progress without new executive talent, which explains his decision to ask for the replacement of the CEO.
It’s not clear though what stands behind Mr. McGuire’s decision to oust Mr. Hassell. Since the new CEO was appointed in August 2011, the stock has gained around 60%. The stock of Bank of New York has gained around 80% in the last three years alone; by comparison Goldman Sachs Group Inc (NYSE:GS) gained 50% in the same period.