Trian Built Three New Undisclosed Positions in Early 2020

(Bloomberg) -- Nelson Peltz’s Trian Fund Management said it used volatility in the early part of the year to build new positions in three undisclosed companies that eventually could comprise about a third of its portfolio.

The investment firm made the disclosure in its second-quarter letter to investors, a copy of which was obtained by Bloomberg. New York-based Trian said the investments currently make up about 20% of its portfolio and that it intends to build on them.

“We are well positioned to be a catalyst for positive operational, strategic and governance changes at each of these new positions,” Trian said in the Aug. 11 letter. “There is an opportunity for these companies to meaningfully improve operating performance and capitalize on potential industry consolidation.”

The investment firm referred to the new stakes as “Positions F, G and R” in the letter and said that R trades at a significant discount to peers for “idiosyncratic reasons” that are fixable.

Trian funded the new positions by monetizing its stakes in Legg Mason, which was acquired by Franklin Resources Inc. on July 31, and Bank of New York Mellon Corp. It also sold a portion of its position in nVent Electric Plc, Mondelez International Inc. and General Electric Co.

Confidential Treatment

Trian said Friday it had omitted confidential information in its quarterly filing, and that it would file separately with the U.S. Securities and Exchange Commission.

Investment firms are able to temporarily conceal new positions in companies in their quarterly disclosures with permission from regulators if, for example, they’re still building their stakes and fear that disclosing them would cause a stock to rise.

Trian did something similar in August 2018 before eventually disclosing a position in PPG Industries Inc. a little more than two months later, as it sought to break up the company and oust its chief executive officer.

As of July 1, Trian had $6.74 billion in assets under management, and an additional $1.4 billion in callable commitments, according to the letter.

Trian also said it returned about 15% on its investments during the second quarter but was still down about 13.3% this year.

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