Hedge Funds Find That Activism Pays

Strong returns have led to a wave of new investment in activist funds
ConAgra Foods’ corporate headquarters in Omaha Photograph by Eric Francis/Bloomberg

Onetime Carl Icahn protégé Keith Meister, 39, engineered a quick sale of Ralcorp Holdings, which makes private-label foods for grocers. In August he bought 5 percent of Ralcorp, which walked away from a takeover bid by rival ConAgra Foods the year before. With Meister on the board, Ralcorp changed its mind and sold. When ConAgra completed its $5 billion acquisition in November, Chief Executive Officer Gary Rodkin said it made his company a leader in North American foods. Ralcorp CEO Kevin Hunt said the deal provided “compelling cash value to shareholders.” Meister’s Corvex Management turned a quick $90 million profit on its $189 million investment, a 48 percent return in a matter of months.

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