More players, bigger targets

Tue May 29, 2007

A strategy pushing corporate change has gone mainstream. What will happen to returns?

By Eric Baum

Longtime value investor Lawrence J. Goldstein never planned to run a dedicated activist hedge fund, a strategy associated with fiery rhetoric and aggressive attacks on corporate management. But that was before the founder of Santa Monica Partners, which manages $100 million of hedge fund assets, received a challenge from William Steiner, the legendary activist who was impressed by Goldstein’s campaign to reform The First Years, a baby products retailer that is now part of The RC2 Corp. in Oakbrook, Ill.

“I opened my mail one afternoon, and a check for $3 million fell out,” Goldstein says, adding that the money, which came from Steiner, was the beginning of his activist Santa Monica Opportunity Fund.

Goldstein is among the legions of managers who have moved into the activist camp in recent...

ISSN: 2151-1845 / CDC10004H

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