Chidem Kurdas
Long-term activist investors take big risks but when they win, they win big. The bet Nelson Peltz’s Trian made on Tiffany demonstrates this.
When Mr. Peltz began buying Tiffany stock in 2007, the credit and property bubbles were collapsing. Jewelry businesses did not look promising amid the recession, but he went on acquiring more Tiffany stock in 2008—of course, it was cheap then.
At the end of 2008, Tiffany shares were around $25. In the past few days the price has been fluctuating a little below $65. Last month the company reported better-than-expected sales and a stronger earnings outlook.
Trian Fund Management is still a large stockholder, even after Peter May, a Trian manager and Tiffany director, sold some of his holding.
This is obviously a long-term investment but at some point the funds will take profits. Barring a particularly bad economic shock, Tiffany should pay big time for Trian investors.
When I happened to mention this, someone sniffed: “So the fat cats get even fatter!” Well, those “fat cats” include pensions. You’d want a hedge fund to make money for your retirement, wouldn’t you?
Tags: Nelson Peltz, Peter May, Tiffany & Co.
HedgeFundSmarts 
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