Nelson Peltz’s Trian Partners Down 16% In March As Unhedged Bets In Food & Beverage Slammed

Nelson Peltz and Trian Partners were amongst those not “immune” to the coronavirus impact on markets to start the year, with his portfolio taking a 16% hit in March alone.

Year to date, it puts the asset manager down nearly 25%, far exceeding the S&P’s nearly 18% drop YTD, according to Bloomberg. Trian investments General Electric and Proctor and Gamble saw their shares drop 37% and 9.7%, respectively, for the year. 

Trian also owned shares of food distributor Sysco, which fell disproportionately to the rest of the market as its customer base shut down across the U.S. and Europe. Sysco shares are down 46% on the year and the company has since said it’s going to suspend its share buyback program. It also drew down $1.6 billion of a $2 billion credit line. 

Trian is also the largest holder in Wendy’s, which is down 33% from the beginning of the year. Wendy’s also suspended its share buyback program.

One of the Trian’s newest investments, plumbing equipment maker Ferguson Plc, is also down about 26% this year. Trian expects that things could get worse, stating that Ferguson’s business could be “significantly impacted” by the ongoing lockdown.  

Trian said: “Despite the current economic disruption caused by Covid-19, we believe that Ferguson is positioned to withstand a market downturn and continue to believe it will generate attractive returns over a long-term holding period.”

Specifically, Trian’s “long only” focus and “lack of hedges” makes the fund more vulnerable than usual when markets turn lower, Bloomberg noted. 

Peltz joins a long list of big name investors who, despite being heralded as geniuses during an 11 year Fed-induced “bull market”, were unable to predict or mitigate the impact of the coronavirus on markets.

In mid-March, for example, we reported that Ray Dalio’s macro fund was crushed 20% when the market crashed weeks after Dalio claimed “cash is trash”.