January 6, 2020 / 11:12 PM / 21 days ago

Jana Partners' activist fund gains 52% as bets such as ConAgra pay off

BOSTON, Jan 6 (Reuters) - Jana Partners LLC, the hedge fund that concentrates exclusively on activist investing after shuttering two stock-picking portfolios early last year, told investors that its Jana Strategic Investment fund returned 52% in 2019, two of them told Reuters on Monday.

The portfolio was launched in 2010 and is now the firm's biggest after Jana last year liquidated its Jana Partners and Jana Nirvana funds. Over its lifetime the JSI fund has returned an average 17.5% a year, one of the investors said.

The JSI Benchmark A portfolio gained 48%.

A spokesman declined to comment on the numbers. The investors asked not to be named because they were not permitted to speak publicly about the private hedge fund.

Last year's gain is sure to rank Jana as one of 2019's biggest winners in a field of activist investors that push for operational fixes, refreshed boards and even company sales.

Many hedge funds that pursue this type of strategy posted strong returns in 2019, helped, in part, by a surging stock market. Through the end of November, this group returned an average 13.09%, a sharp bounce from a loss of 10.4% in 2018, data from Hedge Fund Research show.

Jana's returns stand out, investors said, because gains were largely directly related to work the firm did to make changes at target companies.

Shares of ConAgra Brands Inc., Jana's largest portfolio company, surged 60% last year after the company announced in January that Scott Ostfeld, a partner at Jana Partners, would join its board of directors.

In August, Jana disclosed a large new stake in Outback Steakhouse owner Bloomin' Brands Inc., returning for the second time in nearly two years. By November the company was saying that it would put itself up for sale. In the last three months the company's share price has climbed 15%.

Callaway Golf's stock price has jumped 24.5% in the last six months after Jana took a stake and said it wanted to talk about selling all or part of the business.

Jana Partners also raised $310 million late in the year for a special purpose acquisition company called Osprey Technology Acquisition Corp. The vehicle, run by David DiDomenico, who had been a portfolio manager on the shuttered funds, initially tried to raise $250 million in assets but investors were ready to put in more money. Jana now has two years to buy a target. So-called SPACs have been popular with other hedge funds, including Third Point which raised one in 2018.

Firms like Jana Partners often pounce when there is a dip in stock prices and then work to help create a catalyst for change. Jana didn't deploy capital in 2019 until the market dipped in the second quarter, a person familiar with its operations said.

Jana Partners has built a reputation for working collaboratively and behind the scenes over the nearly two decades since Barry Rosenstein founded the company. (Reporting by Svea Herbst-Bayliss Editing by Sonya Hepinstall)

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