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JANA Partners: Yoga And Italian Suit Activist Investor

Jana Partners, the sometimes activist hedge fund, founded by Barry Rosenstein, revealed a new major stake this week. Jana took a new 2.9 percent stake in the $8.1 billion medical waste management company Stericycle. 

This is not a formal activist target for Jana, yet. But it has all the makings. There’s a good chance that Jana and Rosenstein press for a sale, or even a break-up of the company. Stericycle made its largest acquisition last year and integration has been going slower than expected — with the stock hitting three-year lows. 

In the past, Jana has pushed for change at companies like ConAgra Foods, Computer Sciences, PetSmart, Walgreen and Hertz Global - remember when Icahn effectively called Rosenstein a pansy.

Jana’s Barry Rosenstein operates under a V-cubed strategy, deploying their activist strategy based on value; votes; and a variety of ways to win. The value is the margin of safety, votes includes getting the support of other shareholders, and variety means there are multiple levers for unlocking value.

Rosenstein starts every day with yoga, foregoing surgery for his windsurfing injury from 1992, and relying on yoga. Known for his handmade Italian suits, Rosenstein has always had a chip on his shoulder, being from New Jersey and lacking the “WASP pedigree” that’s typical of hedge fund managers. 

Side note:  We’ll have the 1Q15 edition of the quarterly activist newsletter out next week. You can read more about the quarterly newsletter and check out the new discounted pricing here.

Jana - which represents the initials of Rosenstein’s four children - had Herbalife as its first major, which it helped force into a buyout. From 2003 to 2006, Jana pulled down annual returns of 30%. 

Barry Rosenstein, founder of JANA Partners

Barry Rosenstein, founder of JANA Partners

Jana has had its previous success sticking to the energy, consumer discretionary and IT industries. Before the second quarter of 2015, the fund never had more than 13% of its assets invested in the consumer staples industry - now, consumer staples make up a third of the fund. 

Jana has been quite active with its portfolio. The New York-based fund disclosed stakes in 15 new companies this week and sold 19 of its holdings. In addition to dumping Valeant, Jana also sold its stake in chipmaker Qualcomm.

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