By Svea Herbst-Bayliss
(Reuters) - A former partner at ValueAct Capital Management, one of Wall Street's best known activist investment firms, will start his own firm, according to people familiar with the matter, marking one of the most high profile activist firm launches in years.
Dylan Haggart, who was responsible for ValueAct's investments in private equity firm KKR, investment bank Morgan Stanley and media company The New York Times and serves on the boards of financial technology company Fiserv (NYSE:FI) and data storage company Seagate Technology, has formed a new firm called Fivespan Partners, the people said.
Haggart left ValueAct last year after spending 10 years at the San Francisco-based investment firm.
Fivespan, named for a landmark bridge in Haggart's hometown outside of Ottawa, Canada, is expected to begin making investments in the second half of 2024 and will be based in San Francisco, said the sources who were not permitted to speak publicly about the private firm's plans.
It plans to concentrate on mid-sized companies with chances to grow and work with management teams and boards to help them improve operations and capital structures to make them more valuable, the sources said.
Haggart did not return a call for comment.
The new launch is among the most notable in the activist investor space since Jeffrey Ubben, who founded ValueAct, started Inclusive Capital Partners four years ago and Ed Garden left Trian Investment Management last year to invest his personal fortune through Garden Investments.
Fivespan will begin operations at a time activists are finding fresh favor with investors as many have helped push share prices higher by working with management to make companies perform better. Investors are now rewarding companies that are transforming themselves to be more profitable, allocate capital well, and focus on what matters to shareholders.
Last year, the average activist investor, returned 18% according to Hedge Fund Research data, with some firms posting gains of twice that while the broader market rallied over 24%.
After a decade at ValueAct, Haggart embodies his old firm's hallmarks of staying out of the limelight and trying to work collaboratively with management, people who know him said. He rarely speaks at industry conferences and does not give interviews but is readily available to a target company's executives for advice and guidance, they added.
The new firm plans to create a portfolio with six to 10 investments at a time, the sources said.
Sarah Coyne, who worked with Haggart as a partner at ValueAct and also left in 2023, will be a managing partner at Fivespan, the sources said.
Two other former ValueAct employees, Margarita Krivitski and Andrew Fraga, and Chris Kelly, who previously worked at Voyager Global Management, will join the investment team.
Carly Pollock, a seasoned hedge fund industry executive, will be the new firm's chief operating officer, chief financial officer and chief compliance officer, the people said.