In the rough-and-tumble world of shareholder activism, Barry Rosenstein ’81—founder and managing partner of the multi-billion dollar JANA Partners LLC—likes to think of his approach as “an iron fist encased in a velvet glove.”
“We can be as tough as anybody,” Rosenstein says. “There’s a lot of power behind what we advocate. But on the other hand, we try to work with the boards and management to the extent that we can. What that means is, first of all, making our campaigns and our ownership interest in companies a referendum on who’s got the best idea for value creation. It’s not a campaign of personalities. I try to actually stay out of the press when I can and I’m not looking to embarrass a CEO or nail a scalp to a wall.
“I have one objective only, and that’s for the stock price to reach its potential and generate returns.”
On Thursday, Rosenstein returns to his alma mater to deliver the second annual lecture in the Donald M. Gruhn ’49 Distinguished Financial Speaker Series. Rosenstein’s talk, titled “The Road Less Traveled: From Lehigh to Corporate Activism,” will take place at 4:10 p.m. at Zoellner Arts Center’s Baker Hall. It is free and open to the public.
“Barry Rosenstein ’81 is a great example of the way that Lehigh business graduates are making a real difference in the world,” says Paul R. Brown, dean of Lehigh’s College of Business and Economics. “He is a true pioneer in the field of shareholder activism, earning the respect of his peers in the financial community by holding companies accountable for implementing the sound business strategies necessary to maximize shareholder value.
“In these times of economic uncertainty, Barry offers a clearheaded perspective on how to succeed at the highest levels by doing things the right way. We are thrilled to have him present this year’s lecture in the Donald M. Gruhn ’49 Distinguished Finance Speaker Series.”
One step forward, two steps back
JANA, an event-driven hedge fund headquartered in New York City, has far outperformed relevant benchmarks since its inception in 2001. Among its most notable activist successes are partnering with Carl Icahn to cause Kerr-McKee Corp. to sell underperforming assets and recapitalize—resulting in the ultimate sale of the company.
In 2008, JANA became the first activist to partner with a venture capital fund when it caused CNET Networks to sell itself to CBS, Inc. Other activist victories include bringing about transformational change while maximizing shareholder value at Artesyn Technologies, Deutsche Bourse, Houston Exploration Co., Herbalife, InterCept, Siebel Systems, SourceCorp, Time Warner, and Titan International, among other companies.
Rosenstein says he prefers to “work behind the scenes.
“We’ll meet with the management and the board privately and try to demonstrate analytically why our ideas make sense and why we think they ought to pursue, perhaps, a different path,” he says. “At this point, our reputation is fairly well known so they know we’re not going away. In most cases, we’ve gotten companies to implement the kind of changes we advocate without a big public fight. That’s our desired approach to activism.”
Rosenstein, who graduated from Lehigh with an accounting degree before earning an MBA from the University of Pennsylvania’s Wharton School of Business, says his lecture will draw on his own experiences and career to help Lehigh students “with what they may be feeling today and encountering in terms of entering the job market in a very difficult time.
“I think a lot of people, when they see somebody who’s attained some level of success, mistakenly assume that it’s just been a straight shot to that point. My career, as well as probably everybody else’s, has been anything but that. It’s been one step forward, two steps back all the time.
“I’m going to take them through my career and, through a number of anecdotes, give them some insights into how I got from Lehigh to what I’m doing today and the ups and downs along the way. I think they’ll find it instructive. And I’ve got a couple of messages to pass along associated with that.”