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A Big Disney Fight Isn’t Nelson Peltz’s Only Drama
The billionaire is in the hot seat after an investor exodus and employee tensions rattled his hedge fund
By Cara Lombardo and Lauren Thomas
March 17, 2024 - 10:23 am EDT
Nelson Peltz’s hedge fund had a problem. A few years ago, investors in Trian Partners were yanking hundreds of millions of dollars after its performance had soured.
Around the same time, Peltz’s son, Matt, and others at the firm were eyeing a big bet on one of the most high-profile targets imaginable, Disney. They had watched the media giant’s stock plummet as it poured billions into its new streaming service.
Nelson, who had become a billionaire investing in household names like Pepsi, saw a chance to use his firm’s operational know-how to turn around a struggling business. A big splash could also attract new investors. Peltz’s neighbor and friend, former Marvel Entertainment Chairman Isaac “Ike” Perlmutter, was one of Disney’s largest individual shareholders, and later threw his support behind the effort.
The firm is now waging what’s expected to be the costliest proxy fight ever for two seats on Disney’s board. But while arguing it can help Disney “restore the magic,” Trian has quietly been grappling with its own upheaval.
Trian’s assets under management dropped following a bruising stretch that included a painful bet on General Electric. Ed Garden, Nelson’s 62-year-old son-in-law and a co-founder of Trian, unexpectedly departed and is not speaking to Nelson after a power struggle within the firm that many expected he would one day lead. Matt Peltz’s ascent zapped morale among employees, prompting some to leave.
With two of Nelson’s sons now involved, some employees resent what they see as preferential treatment. Besides Matt, who joined Trian in 2008, another son, Diesel, joined more recently. He had previously launched a mobile app that aimed to cure FOMO by helping friends meet up in real life. Another son, Brad, is a former professional hockey player who now works with a franchisee of Wendy’s, a longtime Trian investment.
rian is spending an estimated $25 million on the Disney effort.
A victory could lend credibility to the newest iteration of Trian after a rocky run. A loss could raise the question of whether Trian is nearing the end of its ride as one of the most feared activist hedge funds.
This account is based on conversations with roughly two dozen people familiar with the dynamics in the firm and familiar with its key figures.
‘Persistence’
Peltz, whose low, booming voice commands a room, for decades has been one of Wall Street’s chief rabble-rousers, buying up big chunks of companies’ stock and demanding a say in their business plans to make them more profitable.
He is quick to correct anyone who lumps him in with activist investors like Carl Icahn—he instead brands himself a “constructivist” who works alongside CEOs and boards. Yet several of his firm’s campaigns have ballooned into some of the most memorable corporate clashes in history.
One of his personal 10 commandments, according to a book of quotes his family made for a recent birthday, is: “Just make a pain in the *** of yourself. They don’t teach persistence in business school.”
Peltz was raised in a middle-class family in Brooklyn. He delights in recounting how he dropped out of the University of Pennsylvania’s Wharton School to become a ski instructor. He soon needed more cash, so picked up a few shifts at his father’s food-distribution business with the goal of returning to the slopes, he said on fellow billionaire David Rubenstein’s Bloomberg TV show in 2022. After finding he couldn’t help but point out a few missed opportunities in his father’s operation, he stuck around to fix the issues himself.
He sold that business, then built a packaging-and-container empire with help from junk-bond king Michael Milken and sold that. He personally made over $500 million on the latter sale. He and business partner Peter May notched another big payday years later when they bought and sold the Snapple beverage business.
He and May formed Trian in 2005 with Garden, who by then was married to Peltz’s daughter.
One of Trian’s first big splashes was an investment in Heinz, which it urged to pare some costs while increasing marketing spending. (The firm had tried to get a board seat for the former pro golfer Greg Norman, a friend of Peltz’s, but was unsuccessful.) Heinz was later sold to a group that included Warren Buffett.
Trian often highlights how many companies that initially resisted its involvement later embraced it. After failing to get on the board of chemical company DuPont, the firm got kudos for helping it orchestrate its merger with Dow.
When Peltz ran to join the board of Procter & Gamble in 2017, a contentious shareholder vote ended with the company winning by a thin margin. P&G gave him a board seat anyway. He quickly helped dismantle its jumbled management structure, a pet peeve of his. By the time he stepped down in 2021, P&G’s stock had risen 58%.
Peltz encourages Trian employees to solve thorny issues through what he calls “respectful confrontation.” Coffee mugs in Trian’s offices say “Sales up, expenses down” on one side and “Cash is king” on the other. He sits in meetings with his elbows on the table and fingers interlaced, often looking eager to interject his thoughts.
His specialty is in advising companies with recognizable brands. He sees himself as a savant of changing consumer tastes, a skill he’s quipped comes from being a father of 10 children who span several generations.
He boasted to friends when one daughter, the model and actress Nicola Peltz, began dating the eldest son of soccer star David Beckham and former Spice Girl Victoria Beckham. The pair married in 2022 on the Peltzes’ Palm Beach estate, where guests included Milken and Serena Williams.
He recently helped fund a movie Nicola wrote and starred in, in which she played a poor teenager trying to save money to help her brother. One of his sons, Will, is an actor and model who has walked the runway for Dolce & Gabbana. His youngest are twins in their early 20s.
He makes no effort to avoid flaunting his fortune. The diamond ring he bought his wife “covers the whole space between the base of the finger and the knuckle,” a friend told The Wall Street Journal in 1988. Years ago, he famously tussled with neighbors near his Bedford, N.Y., estate over the noise from his helicopter commute to Manhattan. He is often seen palling around with fellow billionaires including Elon Musk.
Peltz held a ritzy fundraiser for then-President Donald Trump leading up to the 2020 election, but told CNBC he was sorry for voting for him after the Jan. 6 riots.
He now spends most of his time in Florida, where Trian has an office and he lives with his wife, Claudia, a former model and the mother of eight of his children. Their expansive oceanfront property was once owned by Georgia O’Keeffe’s sister and her railroad baron husband.
Lackluster returns
Some of Trian’s investors were becoming uneasy in the past few years.
The firm had made a $2.5 billion bet in 2015 on General Electric, which had become an unwieldy conglomerate. In one of its famously dense white papers, Trian predicted GE’s stock price could gain 75% in the next two years with the right changes. Garden, who’d championed the investment, joined the board.
But a series of problems, including a $15 billion funding shortfall, pushed GE shares to their lowest levels in years and, by 2021, prompted GE to break itself apart. For a while, Trian was staring down well over $500 million of losses on the investment. (By now, it has roughly broken even.)
California State Teachers’ Retirement System, the big pension that had invested with Trian for years, submitted one of the largest requests to withdraw its money. The New York State Common Retirement Fund also notified Trian it intended to pull over a billion dollars.
Much of Trian’s money now comes from Asia and the Middle East, through sovereign-wealth funds of countries such as Kuwait. The full effect of the redemptions hasn’t necessarily been seen, given that most hedge funds require them to happen slowly.
Trian’s assets under management dropped from around $12.5 billion in 2015 to around $10 billion now, which includes well over $2 billion worth of Disney shares Peltz’s friend Perlmutter lent to its proxy fight effort.
From 2019 to 2023, Trian’s cumulative return in its flagship investment fund was 59%, or 9.7% annually. The S&P 500, by comparison, rose 87% over that period, or 14% annually.
Trian said it has had more money coming than going in the past two years. It also said since its inception, it has outperformed the S&P 500.
One question mark in Trian’s portfolio is Wendy’s, where Peltz, May and Matt are all on the board and the elder two have been involved for over 15 years. Its stock has barely budged over the past five years. Trian explored an acquisition of it in 2022 that it ended up not pursuing. (The fast-food chain reimburses Peltz for around $500,000 or more of professional security services each year.)
Shares of Dove-soap maker Unilever are also little changed since Peltz joined its board in 2022.
Trian’s best-performing investments in recent years include Ferguson, a British plumbing-supply company it bought shares of in 2019. It has returned an average of over 25% a year for the firm.
The fourth founder
Some Trian employees were growing frustrated as the profile of Nelson’s son, Matt, continued to rise in the past several years.
Matt Peltz joined Trian after graduating from Yale and completing a short stint at Goldman Sachs. Matt is a “Star Wars” fan and ancient Roman history buff whose frequent refrain in the Trian offices is: “We are students of business.”
In addition to driving investment ideas, Matt began traveling to see investors, often in place of the original founders. He has also been known to survey who is at their desks when he arrives in the morning.
“It was clear that at some point, Trian went from having three founders to having four,” one person said. The office dynamic prompted several employees to leave in recent years.
It also strained the relationship between Peltz and Garden, which was already complicated by the fact that Garden’s wife—Peltz’s daughter—was not on good terms with Peltz.
Last June, Trian announced Garden was leaving the firm. The following month he launched his own firm with another Trian alum. The news surprised many on Wall Street who had assumed he’d eventually take over.
Matt Peltz and another partner, Josh Frank, 45, were promoted to co-chief investment officers. Trian’s core decision makers are now those two, Nelson, May—who is Matt’s godfather—and two other partners, Head of Research Brian Baldwin and Chief Legal Officer Brian Schorr.
Frank specializes in consumer and industrials companies, while Baldwin specializes in financial companies. The two represent the firm on the board of asset-manager Janus Henderson in seats once held by Nelson and Garden.
The two have been behind several of the firm’s recent investments including Allstate and Unilever. Baldwin and another younger partner, Ryan Bunch, have been deeply involved in Disney.
“There’s a lot of positivity, energy and momentum in the firm,” Frank said in an interview.
‘I’d rather be rich than right’
Trian says it now employs around 50 people, and it is all hands on deck as the Disney vote approaches. Nelson, Matt and others are meeting with Disney investors one by one to make their case for adding Nelson and their other nominee, Disney’s former finance chief, Jay Rasulo, to the board.
Suggestions in its recent Disney white paper for on-again CEO Bob Iger include shrinking Hulu and improving the guest experience at its theme parks. Trian’s push got a big boost from Perlmutter, who entrusted his shares’ voting rights to Trian, contributing the vast majority of Trian’s stake.
Working against Trian could be the fact that Disney’s share price has already improved. The company last month reported better-than-expected earnings and unveiled a slew of major announcements, sending its stock up nearly 12% in one day.
Proxy advisers are expected to weigh in any day with how they recommend shareholders vote, and that could tip the scale in either side’s favor.
Trian could always back down before the vote, as it did last year following a short-lived campaign at Disney. Activists typically have many ways to make money—and Disney’s share price has already jumped from well under $100 to above $110 since Trian arrived. “I’d rather be rich than right” is one of Peltz’s oft-repeated lines at the office.
The bigger question is whether this could be one of Trian’s last big moments in the spotlight. Some wonder if it will still mount high-profile proxy fights once the next generation of leaders fully take over, which could be many years from now. Peltz’s mother lived to age 108.
For now, Peltz remains feared, even when taking on projects outside of the firm.
He, Perlmutter and real-estate titan Stephen Ross were part of a group that covertly tried to buy a local hospital not far from their Florida mansions in the past few years, aiming to secure high-quality care for the West Palm Beach area. While the men considered it a charitable endeavor, the hospital consulted investment bankers to fend them off.
Write to Cara Lombardo at cara.lombardo@wsj.com and Lauren Thomas at lauren.thomas@wsj.com
Peter Rudegeair contributed to this article.
A Big Disney Fight Isn’t Nelson Peltz’s Only Drama
The billionaire is in the hot seat after an investor exodus and employee tensions rattled his hedge fund
By Cara Lombardo and Lauren Thomas
March 17, 2024 - 10:23 am EDT
Nelson Peltz’s hedge fund had a problem. A few years ago, investors in Trian Partners were yanking hundreds of millions of dollars after its performance had soured.
Around the same time, Peltz’s son, Matt, and others at the firm were eyeing a big bet on one of the most high-profile targets imaginable, Disney. They had watched the media giant’s stock plummet as it poured billions into its new streaming service.
Nelson, who had become a billionaire investing in household names like Pepsi, saw a chance to use his firm’s operational know-how to turn around a struggling business. A big splash could also attract new investors. Peltz’s neighbor and friend, former Marvel Entertainment Chairman Isaac “Ike” Perlmutter, was one of Disney’s largest individual shareholders, and later threw his support behind the effort.
The firm is now waging what’s expected to be the costliest proxy fight ever for two seats on Disney’s board. But while arguing it can help Disney “restore the magic,” Trian has quietly been grappling with its own upheaval.
Trian’s assets under management dropped following a bruising stretch that included a painful bet on General Electric. Ed Garden, Nelson’s 62-year-old son-in-law and a co-founder of Trian, unexpectedly departed and is not speaking to Nelson after a power struggle within the firm that many expected he would one day lead. Matt Peltz’s ascent zapped morale among employees, prompting some to leave.
With two of Nelson’s sons now involved, some employees resent what they see as preferential treatment. Besides Matt, who joined Trian in 2008, another son, Diesel, joined more recently. He had previously launched a mobile app that aimed to cure FOMO by helping friends meet up in real life. Another son, Brad, is a former professional hockey player who now works with a franchisee of Wendy’s, a longtime Trian investment.
rian is spending an estimated $25 million on the Disney effort.
A victory could lend credibility to the newest iteration of Trian after a rocky run. A loss could raise the question of whether Trian is nearing the end of its ride as one of the most feared activist hedge funds.
This account is based on conversations with roughly two dozen people familiar with the dynamics in the firm and familiar with its key figures.
‘Persistence’
Peltz, whose low, booming voice commands a room, for decades has been one of Wall Street’s chief rabble-rousers, buying up big chunks of companies’ stock and demanding a say in their business plans to make them more profitable.
He is quick to correct anyone who lumps him in with activist investors like Carl Icahn—he instead brands himself a “constructivist” who works alongside CEOs and boards. Yet several of his firm’s campaigns have ballooned into some of the most memorable corporate clashes in history.
One of his personal 10 commandments, according to a book of quotes his family made for a recent birthday, is: “Just make a pain in the *** of yourself. They don’t teach persistence in business school.”
Peltz was raised in a middle-class family in Brooklyn. He delights in recounting how he dropped out of the University of Pennsylvania’s Wharton School to become a ski instructor. He soon needed more cash, so picked up a few shifts at his father’s food-distribution business with the goal of returning to the slopes, he said on fellow billionaire David Rubenstein’s Bloomberg TV show in 2022. After finding he couldn’t help but point out a few missed opportunities in his father’s operation, he stuck around to fix the issues himself.
He sold that business, then built a packaging-and-container empire with help from junk-bond king Michael Milken and sold that. He personally made over $500 million on the latter sale. He and business partner Peter May notched another big payday years later when they bought and sold the Snapple beverage business.
He and May formed Trian in 2005 with Garden, who by then was married to Peltz’s daughter.
One of Trian’s first big splashes was an investment in Heinz, which it urged to pare some costs while increasing marketing spending. (The firm had tried to get a board seat for the former pro golfer Greg Norman, a friend of Peltz’s, but was unsuccessful.) Heinz was later sold to a group that included Warren Buffett.
Trian often highlights how many companies that initially resisted its involvement later embraced it. After failing to get on the board of chemical company DuPont, the firm got kudos for helping it orchestrate its merger with Dow.
When Peltz ran to join the board of Procter & Gamble in 2017, a contentious shareholder vote ended with the company winning by a thin margin. P&G gave him a board seat anyway. He quickly helped dismantle its jumbled management structure, a pet peeve of his. By the time he stepped down in 2021, P&G’s stock had risen 58%.
Peltz encourages Trian employees to solve thorny issues through what he calls “respectful confrontation.” Coffee mugs in Trian’s offices say “Sales up, expenses down” on one side and “Cash is king” on the other. He sits in meetings with his elbows on the table and fingers interlaced, often looking eager to interject his thoughts.
His specialty is in advising companies with recognizable brands. He sees himself as a savant of changing consumer tastes, a skill he’s quipped comes from being a father of 10 children who span several generations.
He boasted to friends when one daughter, the model and actress Nicola Peltz, began dating the eldest son of soccer star David Beckham and former Spice Girl Victoria Beckham. The pair married in 2022 on the Peltzes’ Palm Beach estate, where guests included Milken and Serena Williams.
He recently helped fund a movie Nicola wrote and starred in, in which she played a poor teenager trying to save money to help her brother. One of his sons, Will, is an actor and model who has walked the runway for Dolce & Gabbana. His youngest are twins in their early 20s.
He makes no effort to avoid flaunting his fortune. The diamond ring he bought his wife “covers the whole space between the base of the finger and the knuckle,” a friend told The Wall Street Journal in 1988. Years ago, he famously tussled with neighbors near his Bedford, N.Y., estate over the noise from his helicopter commute to Manhattan. He is often seen palling around with fellow billionaires including Elon Musk.
Peltz held a ritzy fundraiser for then-President Donald Trump leading up to the 2020 election, but told CNBC he was sorry for voting for him after the Jan. 6 riots.
He now spends most of his time in Florida, where Trian has an office and he lives with his wife, Claudia, a former model and the mother of eight of his children. Their expansive oceanfront property was once owned by Georgia O’Keeffe’s sister and her railroad baron husband.
Lackluster returns
Some of Trian’s investors were becoming uneasy in the past few years.
The firm had made a $2.5 billion bet in 2015 on General Electric, which had become an unwieldy conglomerate. In one of its famously dense white papers, Trian predicted GE’s stock price could gain 75% in the next two years with the right changes. Garden, who’d championed the investment, joined the board.
But a series of problems, including a $15 billion funding shortfall, pushed GE shares to their lowest levels in years and, by 2021, prompted GE to break itself apart. For a while, Trian was staring down well over $500 million of losses on the investment. (By now, it has roughly broken even.)
California State Teachers’ Retirement System, the big pension that had invested with Trian for years, submitted one of the largest requests to withdraw its money. The New York State Common Retirement Fund also notified Trian it intended to pull over a billion dollars.
Much of Trian’s money now comes from Asia and the Middle East, through sovereign-wealth funds of countries such as Kuwait. The full effect of the redemptions hasn’t necessarily been seen, given that most hedge funds require them to happen slowly.
Trian’s assets under management dropped from around $12.5 billion in 2015 to around $10 billion now, which includes well over $2 billion worth of Disney shares Peltz’s friend Perlmutter lent to its proxy fight effort.
From 2019 to 2023, Trian’s cumulative return in its flagship investment fund was 59%, or 9.7% annually. The S&P 500, by comparison, rose 87% over that period, or 14% annually.
Trian said it has had more money coming than going in the past two years. It also said since its inception, it has outperformed the S&P 500.
One question mark in Trian’s portfolio is Wendy’s, where Peltz, May and Matt are all on the board and the elder two have been involved for over 15 years. Its stock has barely budged over the past five years. Trian explored an acquisition of it in 2022 that it ended up not pursuing. (The fast-food chain reimburses Peltz for around $500,000 or more of professional security services each year.)
Shares of Dove-soap maker Unilever are also little changed since Peltz joined its board in 2022.
Trian’s best-performing investments in recent years include Ferguson, a British plumbing-supply company it bought shares of in 2019. It has returned an average of over 25% a year for the firm.
The fourth founder
Some Trian employees were growing frustrated as the profile of Nelson’s son, Matt, continued to rise in the past several years.
Matt Peltz joined Trian after graduating from Yale and completing a short stint at Goldman Sachs. Matt is a “Star Wars” fan and ancient Roman history buff whose frequent refrain in the Trian offices is: “We are students of business.”
In addition to driving investment ideas, Matt began traveling to see investors, often in place of the original founders. He has also been known to survey who is at their desks when he arrives in the morning.
“It was clear that at some point, Trian went from having three founders to having four,” one person said. The office dynamic prompted several employees to leave in recent years.
It also strained the relationship between Peltz and Garden, which was already complicated by the fact that Garden’s wife—Peltz’s daughter—was not on good terms with Peltz.
Last June, Trian announced Garden was leaving the firm. The following month he launched his own firm with another Trian alum. The news surprised many on Wall Street who had assumed he’d eventually take over.
Matt Peltz and another partner, Josh Frank, 45, were promoted to co-chief investment officers. Trian’s core decision makers are now those two, Nelson, May—who is Matt’s godfather—and two other partners, Head of Research Brian Baldwin and Chief Legal Officer Brian Schorr.
Frank specializes in consumer and industrials companies, while Baldwin specializes in financial companies. The two represent the firm on the board of asset-manager Janus Henderson in seats once held by Nelson and Garden.
The two have been behind several of the firm’s recent investments including Allstate and Unilever. Baldwin and another younger partner, Ryan Bunch, have been deeply involved in Disney.
“There’s a lot of positivity, energy and momentum in the firm,” Frank said in an interview.
‘I’d rather be rich than right’
Trian says it now employs around 50 people, and it is all hands on deck as the Disney vote approaches. Nelson, Matt and others are meeting with Disney investors one by one to make their case for adding Nelson and their other nominee, Disney’s former finance chief, Jay Rasulo, to the board.
Suggestions in its recent Disney white paper for on-again CEO Bob Iger include shrinking Hulu and improving the guest experience at its theme parks. Trian’s push got a big boost from Perlmutter, who entrusted his shares’ voting rights to Trian, contributing the vast majority of Trian’s stake.
Working against Trian could be the fact that Disney’s share price has already improved. The company last month reported better-than-expected earnings and unveiled a slew of major announcements, sending its stock up nearly 12% in one day.
Proxy advisers are expected to weigh in any day with how they recommend shareholders vote, and that could tip the scale in either side’s favor.
Trian could always back down before the vote, as it did last year following a short-lived campaign at Disney. Activists typically have many ways to make money—and Disney’s share price has already jumped from well under $100 to above $110 since Trian arrived. “I’d rather be rich than right” is one of Peltz’s oft-repeated lines at the office.
The bigger question is whether this could be one of Trian’s last big moments in the spotlight. Some wonder if it will still mount high-profile proxy fights once the next generation of leaders fully take over, which could be many years from now. Peltz’s mother lived to age 108.
For now, Peltz remains feared, even when taking on projects outside of the firm.
He, Perlmutter and real-estate titan Stephen Ross were part of a group that covertly tried to buy a local hospital not far from their Florida mansions in the past few years, aiming to secure high-quality care for the West Palm Beach area. While the men considered it a charitable endeavor, the hospital consulted investment bankers to fend them off.
Write to Cara Lombardo at cara.lombardo@wsj.com and Lauren Thomas at lauren.thomas@wsj.com
Peter Rudegeair contributed to this article.
