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Nelson Peltz Poised To Win Seat On Pentair plc. (PNR)’s Board

Famed activist investor Nelson Peltz has stepped up his efforts concerning Pentair plc. Ordinary Share (NYSE:PNR) and registered his first success in so doing, by getting a seat on the company’s Board of Directors. According to a new filing with the Securities and Exchange Commission from Peltz’s Trian Partners, Pentair has agreed to recommend that shareholders vote for an increase in the number of board seats by one and then appoint Mr. Edward P. Garden, Chief Investment Officer of Trian Partners, to the newly created vacancy. The vote will take place at the company’s next annual meeting. The filing also revealed that Trian Partners’ stake in Pentair plc. Ordinary Share (NYSE:PNR) remained unchanged at a little over 13 million shares or 7.22% of the company’s common stock.


The agreement between Trian and Pentair also stipulates that Mr. Garden has the right to attend board meetings in a non-voting capacity until he is officially appointed as a Director. Nelson Peltz and Brian Baldwin, a partner at Trian Management, also have the right to attend board meetings as observers under certain limitations.

“We have maintained an active and constructive dialogue with Trian regarding our common goal of increasing shareholder value, as we do with all of our shareholders. We believe the addition of Ed to our board would bring a shareholder’s perspective and we look forward to benefiting from his insights and Trian’s strong analytical work,” Randall Hogan, Chairman and CEO of Pentair, wrote in a letter to Trian.

Founded almost a decade ago by Peltz, Garden, and Peter May, Trian Partners has grown to manage a public equity portfolio worth in excess of $9 billion. The funds are spread across a number of sectors, with consumer staples leading the pack at 47% of the value of the fund’s portfolio, followed by financial at 21% and materials at 18%. Mr. Peltz has an extensive track record, serving on the Board of Directors of companies like Bank of New York Mellon Corp (NYSE:BK) and Mondelez International Inc (NASDAQ:MDLZ). His activist efforts also won Trian Partners two board seats at PepsiCo, Inc. (NYSE:PEP) in January 2015. The fund has been pushing for Pepsi to separate its profitable snack business from its sluggish beverages business. It’s not been all roses for Peltz however, as he lost a contentious proxy battle with DuPont earlier this year, failing to secure board seats at the company’s latest shareholder meeting. In a more recent move, Peltz convinced the management of SYSCO Corporation (NYSE:SYY) to expand its board of directors and award Trian two seats.

Nelson Peltz
Nelson Peltz
Trian Partners

Let’s take a step back and analyze how tracking hedge funds like Trian Partners can help an everyday investor. Through our research we discovered that a portfolio of the 15 most popular small-cap picks of hedge funds beat the S&P 500 Total Return Index by nearly a percentage point per month on average between 1999 and 2012. On the other hand the most popular large-cap picks of hedge funds underperformed the same index by seven basis points per month during the same period. This is likely a surprise to many investors, who think of small-caps as risky, unpredictable stocks and put more faith (and money) in large-cap stocks. In forward tests since August 2012 these top small-cap stocks beat the market by an impressive 60.4 percentage points, returning 118% (read the details here). Follow the smart money into only their best investment ideas all while avoiding their high fees.

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