Key Takeaways
- • Steve Bates, chairman of Third Point Investors Limited (TPIL), a London-listed closed-end fund managing approximately £868 million, resigned on December 23, 2021, citing personal threats made during activist engagement meetings.
- • Asset Value Investors (AVI) and three other shareholders collectively control more than 10% of TPIL's voting rights and have been pressuring the fund over underperformance concerns.
- • Dan Loeb, Third Point's founder, issued a public rebuke of the activist investors, characterizing their conduct as "juvenile antics" and "inexperienced" behavior that constitutes "a stain on institutional investors" engaging constructively with boards.
- • The activist campaign against TPIL represents an escalation in pressure on Loeb's hedge fund operations, following Third Point's own activist involvement in other companies including CoStar and Intel.
- • AVI responded that it had supported Bates' appointment and expressed regret over his resignation, though the broader activist coalition's position on the chairman's departure remained unclear.
Summary
Third Point Investors Limited faced significant governance turmoil on December 23, 2021, when Steve Bates resigned as chairman of the London-listed investment fund after serving in the role for three years. Bates, a former JPMorgan banker, announced his departure citing circumstances that made his continued directorship "impossible." The fund subsequently disclosed that Bates had suffered personal threats during board meetings arranged with representatives of activist investors, though the fund did not identify who made the threats.
The resignation occurred amid mounting pressure on TPIL from a coordinated activist campaign. Asset Value Investors (AVI) and three co-investors collectively hold more than 10% of the fund's voting rights and have targeted TPIL over perceived underperformance. The activists have engaged directly with the board, prompting the meetings at which Bates reportedly encountered threats. A second activist group, Staude Capital, was also cited as a party to these discussions.
Dan Loeb responded sharply to Bates' departure, characterizing the activists' behavior as damaging to institutional investor credibility. "The behavior by these so-called 'activists' is a stain on institutional investors who attempt to engage constructively with boards and management teams," Loeb stated, adding that the conduct reflected "juvenile antics" that "smack of desperation and inexperience." He framed Bates' resignation as "a loss for all shareholders."
AVI issued a measured response, noting that it had supported Bates' original appointment and expressing that his resignation was "unfortunate." The statement suggested AVI's position may have differed from that of the broader activist coalition, though AVI remained part of the coordinated shareholder group seeking changes at the fund.
The episode reflects broader tensions between hedge fund managers and activist investors, and adds another layer to Third Point's complex relationship with activism—the firm itself has pursued activist campaigns at other companies, including attempts to drive strategic changes at CoStar and Intel.
The resignation occurred amid mounting pressure on TPIL from a coordinated activist campaign. Asset Value Investors (AVI) and three co-investors collectively hold more than 10% of the fund's voting rights and have targeted TPIL over perceived underperformance. The activists have engaged directly with the board, prompting the meetings at which Bates reportedly encountered threats. A second activist group, Staude Capital, was also cited as a party to these discussions.
Dan Loeb responded sharply to Bates' departure, characterizing the activists' behavior as damaging to institutional investor credibility. "The behavior by these so-called 'activists' is a stain on institutional investors who attempt to engage constructively with boards and management teams," Loeb stated, adding that the conduct reflected "juvenile antics" that "smack of desperation and inexperience." He framed Bates' resignation as "a loss for all shareholders."
AVI issued a measured response, noting that it had supported Bates' original appointment and expressing that his resignation was "unfortunate." The statement suggested AVI's position may have differed from that of the broader activist coalition, though AVI remained part of the coordinated shareholder group seeking changes at the fund.
The episode reflects broader tensions between hedge fund managers and activist investors, and adds another layer to Third Point's complex relationship with activism—the firm itself has pursued activist campaigns at other companies, including attempts to drive strategic changes at CoStar and Intel.
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