By Svea Herbst-Bayliss
BOSTON – Jana Partners LLC, the activist investor that successfully pushed for big changes including sales at portfolio companies, told investors that its JSI Benchmark A portfolio returned 30% after fees last year, two sources said on Monday.
The gains were fueled by campaigns at Vonage Holdings Corp, which sold itself, and Laboratory Corp of America Holdings, which announced a $2.5 billion share buy-back and plans to pay a dividend.
The portfolio’s gains last year beat the benchmark HFRI Activist Index’ 19% return, as record setting market gains helped investors.
Over the last three years, the JSI Benchmark A portfolio returned an average 30% a year after fees, the investors said.
The Jana Strategic Investment fund, structured more like a private equity fund, returned 26% after fees last year, said the sources who are not permitted to discuss the private funds’ returns. Since its 2010 founding, the JSI fund returned an average 18% a year, one source said.
Jana Partners also filed a preliminary prospectus for its second special purpose acquisition company called Osprey Technology Acquisition Corp II.
A spokesman declined to comment.
The numbers come three years after Jana, founded by Barry Rosenstein in 2001, announced the closing of its event-driven funds.
The firm manages $1.6 billion in its activist strategy and is best known for having pushed for changes at Whole Foods that led to the sale to Amazon. It is among the most successful of its type, shunning the limelight and trying to work collaboratively with target companies, said industry investors and other fund managers.
Research firm Gordon Haskett named Jana its “activist of the year.”
“Nobody catalyzed more action or was around the hoop more consistently than Jana,” analyst Don Bilson wrote.
A large share of Jana’s returns are directly related to work the firm did to make changes at target companies and did not come from gains in fast growing technology companies or private investments, which Jana does not own.
Shares of Vonage Holdings rose 59% between May and November when the company announced a sale to Ericsson. LabCorp’s stock price climbed 54% as Jana urged a strategic review. Jana also pushed for a sale of data center company Cyrus One which was taken private by buyout firms KKR & Co and Global Infrastructure Partners.
Now it is pushing to break up Encompass Health, scuttle Zendesk’s planned purchase of Momentive Global and get Mercury Systems to consider strategic alternatives.
(Reporting by Svea Herbst-Bayliss; Editing by David Gregorio)