Another Hedge Fund Calls It Quits

on Feb 28, 2020
  • Hedge fund manager Clifton Robbins is calling it quits.
  • His activist fund Blue Harbour Group outperformed the broader market in 2019.
  • He is best known for a "friendly activism" style of engaging with companies.

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Clifton Robbins isn’t a mainstream hedge fund manager but by Wall Street’s standards, he is no lightweight. Robbins said Friday morning his $2 billion Blue Harbour Group hedge fund will close shop because he wants to “do something else” in life, The Wall Street Journal reported.

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Winning Hedge Fund

Robbins’ hedge fund delivered a 33% return last year which beat the overall market. But a few weeks into 2019 and his fund is performing inline with the broader market at around a 3% loss. He told WSJ now feels like a “good time to wrap up” and clients were notified they will be receiving their capital back.

Robbins has shied away from public and vocal activist campaigns, such as Paul Singer’s campaign thousands of miles away against Japan’s SoftBank. Instead, Robbins followed a pattern more consistent with “friendly activism” — that is quietly buying a stake in a company and quietly exerting influence to work with a management team outside of the spotlights of the media.

Over the years he noticed a shift in tone as companies are more open to shareholders’ recommendations, even activist firms. He told WSJ changes in corporate governance “have made it easier for people like me to have access to corporate boardrooms.”

A Former ‘Barbarian’

Despite staying out of the spotlight, Robbins’ 1988 fight for control of RJR Nabisco was featured in the “Barbarians at the Gate” book. The title very much suited his former style as a “barbarian” Wall Street crusader who waged war on boards in the 1980s. 

According to a profile of Robbins by Institutional Investor, Robbins didn’t want to be a part of the “alpha-male, my-way-or-the-highway, flame-throwing activist hedge fund manager.” Instead, he prefers a more friendly “gentleman activist” and being honest and direct with people is a better strategy.

Robbins said in the profile companies worth $2 billion to $10 billion are “fertile for collaborative” strategies because the hedge fund was viewed favorably as a “welcomed” asset. These companies aren’t covered as much compared to mega-caps among Wall Street research firms so they have “more limited internal resources” to analyze new strategies.

“So we usually find that they have not previously considered the value-­unlocking ideas we bring to the table,” he told Institutional Investor.

So what’s next for the hedge fund veteran? According to comments he made to WSJ, he will establish a family office that follows similar moves by hedge fund titans like David Tepper, Leon Cooperman, and Carl Icahn who all closed themselves to outside investors.

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