The Activist Report Volume 10 Issue 12 December | 2020 DISSECTING 10 Questions ACTIVIST 13F’S with Greg 45 days after the end of each quarter, 13F filings are made by investors who have more than $100 million of qualifying assets under management. We analyze the 13F filings of the major US activist investors and provide the following data and commentary: Marose Pg. Greg Marose is a co- founder and partner at (i) Aggregate Activist Holdings 8 Profile Advisors. He has (ii) Activist Concentration 8 advised established and (iii) 13F Commentary 9-10 emerging activists on strategic communica- (iv) 13F Analysis - Changes in Activist Holdings 11-16 tions for more than 50 (v) Quarterly Performance of Top Holdings 17-19 campaigns and election contests over the past (vi) Piling On 20 three years. In addition, he periodically applies his investor-side per- spective to helping boards and management teams navigate governance disputes. His Under the Threshold practice is known for developing effective Exxon Mobil (OXM): Engine No. 1; Monro (MNRO): Ides Capital; Ovin- tiv (OVV): Kimmeridge Energy; Aimco (AIV): Land & Buildings; Crown campaign strategies, producing impactful Castle (CCI): Elliott Management; Evergy (EVRG): Elliott Manage- letters and presentations, and positioning ment; Opko Health (OPK): Sian Capital; ZIOPHARM (ZIOP): WaterMill clients to engage with the media, proxy advi- On December 7, 2020, Engine No. 1 (“EN1”) sent a letter to Exx- sory firms and institutional shareholders. N on Mobil Corp’s (XOM) Board announcing that it has identified E the following four director candidates to be nominated, if nec- 13DM: What prompted you and Rich My- W essary, to the Company’s Board: (i) Gregory J. Goff, former CEO ers to found Profile Advisors? Tell us a little . about your practice. What are some exam- continued on page 21 ples of your client representation as it relates Around the World to shareholder activism? Artis Real Estate: Sandpiper Group; Countryside Prop- GM: We saw a lot of “white space” when erties: Browning West; Quadient SA: Teleios; ARYZTA: starting Profile in 2018. While there are many Veraison/Cobas; Ferguson Plc: Trian Fund Mgt.; Tokyo Dome: Oasis Mgt.; Thyssenkrupp AG: Cevian public relations firms exclusively focused on On December 1, 2020, Artis Real Estate Invest- continued on page 2 N ment Trust (ARESF) and Sandpiper Group (5%) E entered into an agreement, pursuant to which W IN THIS Sandpiper agreed to withdraw its special meeting Issue . request and pending litigation and the Company agreed to ac- Item Pg. cept the resignations of four incumbent board members - Armin Martens, Edward 10 Questions with Greg Marose 1 Warkentin, Wayne Townsend, and Bruce Jack, and appoint Sandpiper’s five nomi- Dissecting Activist 13F’s 1 nees: Heather-Anne Irwin, Samir Manji, Mike Shaikh, Aida Tammer, and Lis Wigmore Under the Threshold 1 continued on page 23 Around the World 1 Investor Communications Network Monthly Activist Activity 4 152 West 57th Street, 41st Floor One to Watch 4 New York, NY 10019 Nomination/Standstill Calendar 5 www.13DMonitor.com (212) 223-2282 Activist Directory 25 The specific securities identified and described herein may or may not be held at any given time by the portfolio of 13D Activist Fund, an SEC registered mutual fund managed by an affiliate of 13D Monitor. The Activist Report 2 GREG MAROSE (cont’d. from pg. 1) 2 defending companies, relatively few have the capabilities, expertise and 13DM: Is it more difficult to advise cli- 13DM: What are the most strategic personnel to add quantifiable value for ents virtually? ways and means that a company can activists. We have a ten-person team use to most effectively engage with the that specializes in working with inves- GM: It’s been easier in some respects media to reach their key stakeholders? tors to develop resonant campaign to service clients since transitioning to How has this evolved over the last 10 strategies, produce well-structured a remote working environment. In the years? letters and press releases, create the activism world, you need to be reach- right presentations, and prepare for able at all times and well positioned to GM: If you’re an activist, the media rep- productive engagement with proxy ad- quickly provide good advice and strong resents an important and value channel visory firms and institutions. Our 50+ materials. There are fewer distractions for amplifying your views to the mar- mandates since inception include large these days and the rise of virtual meet- ketplace. Major media outlets – ranging cap proxy fights (e.g. Campbell Soup), ing applications has made it simpler to from The Wall Street Journal to Bloom- consent solicitations (e.g. HC2 Holdings connect with clients on a moment’s no- berg News to Reuters – have dedicated and Ziopharm Oncology) and strategic tice. We feel that proxy advisory firms, reporters covering shareholder activ- campaigns (e.g. GameStop and Mara- institutional funds and media covering ism. There are also specialized activism thon Petroleum). We also periodically activism have also adapted well to vir- news services that event-driven funds represent companies, who tend to find tual engagement. and other investors subscribe to. Savvy our knowledge of the activism world to activists use firms like ours to generate be very additive. 13DM: Activists have very diverse balanced media coverage and avoid styles from loud and confrontational losing control of their narrative to the 13DM: What effect do you believe the to behind the scenes. Do you take into other side. pandemic has had on the 2020 proxy consideration their style when advising season? 13DM: Activ- “Every campaign is a bit unique and corpo- ists engage GM: The with fewer pandemic than 5% of created a rate governance norms are consistently evolv- public compa- legitimate nies but seem headwind for ing. The best activists are adaptable and flex- to get an inor- activists dur- dinate amount ing the 2020 ible in their styles – not rigidly committed to of media cov- proxy season. erage. What For starters, one formula.” do you think many funds of the media’s had to punt on contests due to issues them about how to proceed with an en- coverage of activism? pertaining to liquidity and redemptions. gagement? Second, funds that did proceed with GM: In our view, the vast majority of contests faced higher hurdles when GM: When our team advises an activ- activist campaigns do not receive a dis- trying to secure support from advisory ist, we like to assess the investor’s situ- proportionate amount of media cover- firms and institutions. Looking ahead ation-specific goals and the company’s age. The average activist actually has to 2021, activists will need to pin their shareholder profile prior to determin- to work pretty hard to generate news campaigns on long-term governance ing an engagement approach. Every around the points in which it first goes issues and sustained value destruction campaign is a bit unique and corpo- public, nominates directors and gets – not what has occurred since the pan- rate governance norms are consistently a verdict from proxy advisory firms. If demic’s onset. The average company is evolving. The best activists are adapt- you are a first-time activist, you may going to get a pass on what has trans- able and flexible in their styles – not also receive some skepticism from the pired during the COVID-19 crisis. rigidly committed to one formula. media and have to be prepared to back continued on page 3 The specific securities identified and described herein may or may not be held at any given time by the portfolio of 13D Activist Fund, an SEC regis- tered mutual fund managed by an affiliate of 13D Monitor. Investor Communications Network, LLC • www.13DMonitor.com • (212) 223-2282 2 RuleThe 14a-8 Activist(cont ‘d from pg. 1) Report 3 (cont’d. from pg. 2) 3GREG MAROSE up your campaign thesis. With this con- 13DM: What is the worst thing a com- companies prior to an activist show- text in mind, there are still the likes of pany can do after being approached by ing up. Other well-functioning boards Carl Icahn that get an overwhelming an activist? react to discontent by engaging with amount of coverage whenever they their investors and then taking steps to tweet or issue a letter. But the big name GM: The worst thing a company can do address concerns. As previously noted, activists also tend to go after more is to avoid engagement with an activist the worst thing a board can do is bury newsworthy, large cap targets. and immediately assume a defensive its head in the sand and view a share- posture. If you’re a company facing a holder as an enemy. 13DM: Once a company is engaged in public or private activist approach, try a proxy fight, there are many ways for to establish a dialogue and find areas 13DM: Do you see the level of share- a company to succeed, but two of the of common ground. The vast majority holder activism increasing or decreas- main ways are either to have a better of activists want to reach consensual, ing over the next five to ten years and plan than the activist or a better rela- value-enhancing deals and avert cost- are there any trends that you foresee? tionship with shareholders than the ac- ly, time-consuming election contests. tivist. Which is more important? GM: We do expect shareholder activ- 13DM: Shareholder activism has be- ism to continue to increase in the years GM: When considering how to ap- come more accepted among institu- to come for a number of reasons. For proach a proxy fight, it is critical to tional investors but seems to still have starters, actively-managed funds need think about the composition of the many critics in C-suites.