Stephen Loukas, David A. Lorber, and Zachary George’s FrontFour Capital Group slighty reduced its stake in OM Group, Inc (NYSE:OMG) this Wednesday. As revealed in an amended 13D Form filed with the U.S. Securities and Exchange Commission, the investment firm sold around 38,000 shares of the company. Its holding amount to around 1.75 million Common Shares, which represent 5.7% of the company’s outstanding stock. Earlier this month, FrontFour Capital Group had disclosed a large increase in its exposure to OM Group and took on an activist stance.
FrontFour Capital Group is an event-driven hedge fund, which is managed by Stephen Loukas, David A. Lorber, and Zachary George. The firm employs a fundamental value-based strategy, along with intensive research, to find great investment opportunities. By seeking out the highest value across a company’s capital structure, FrontFour Capital Group aims to deliver superior risk-adjusted returns. The firm tends to hedge out risk by employing a short/long strategy. In 2011, the Stamford, Connecticut-based fund was named Best Event-Driven Manager by Hedgeweek. Furthermore, it currently boasts an equity portfolio valued at around $716 million, with around 38% of its holdings belonging to companies operating in the finance sector. According to its latest 13F filing, FrontFour Capital Group’s largest positions – excluding ETFs – are ClubCorp Holdings Inc (NYSE:MYCC), Innophos Holdings, Inc. (NASDAQ:IPHS), and Graphic Packaging Holding Company (NYSE:GPK).
As mentioned above, the hedge fund disclosed a large increase in its holding of OM Group, Inc (NYSE:OMG) earlier this month, purchasing around 1.5 million shares. Furthermore, FrontFour Capital went activist on the company and sent a letter to OM Group’s CEO Joseph M. Scaminace, in which it expressed several concerns. In addition to pointing out the main factors responsible for the company’s underperformance, the hedge fund proposed ways to increase shareholder value.
In a recent press release, the fund stated that it has nominated David A. Lorber, Thomas R. Miklich and Allen A. Spizzo to be elected to the board of directors of OM Group. David A. Lorber – the co-founder of FrontFour Capital Group and nominee for director in the upcoming election was quoted as saying in the release that the investment firm is “taking action to ensure that shareholders’ interests are directly represented. With improved Board oversight, OM Group will be well-positioned to execute on its expanding market opportunities, product offerings and to deliver improved margins and cash flows to its shareholders.”
In the filing, along with the recent sale of around 38,000 shares, FrontFour Capital Group disclosed the letter of consent sent to its candidates to the board. In the letter, the hedge fund thanked these individuals for their participation as nominees in the election to OM Group, Inc (NYSE:OMG)’s Board of Directors, which will take place at this year’s annual meeting of stockholders.