Hedge Funds

The new insiders


Managers are inviting investors into club deals; membership promises perils as well as profit

When larger-than-life corporate raider Nelson Peltz mounted his activist play for the board of ketchup giant Heinz last month, he invited along some much smaller guys: Clients of his hedge fund firm, Trian Fund Management, were offered the chance to invest directly in Heinz alongside Peltz through a so-called co-investment transaction.

For Trian, the deal presumably provided an opportunity to bulk up for its proxy war and to curry favor with investors in its newly-minted hedge fund firm. The investors, meanwhile,