Activist investor Jeff Smith, who runs hedge fund Starboard Value, is starting to become a household name on Wall Street.
Smith has sent a letter to Yahoo! urging that they consider combining their business with AOL. Both of the stocks jumped on the news.
Yahoo! was once the target of well-known activist investor Daniel Loeb of Third Point LLC.
A couple weeks ago, Smith made headlines for his monster presentation demonstrating that Olive Garden should change its famous unlimited breadsticks and salad.
Smith, who owns an 8.8% in the restaurant group’s stock, believes that by eliminating the endless menu option the restaurant will be able to save $US5 million per year. He points out that there are too many breadsticks on the table, and they’re being wasted.
Some customers freaked out because they thought that Smith wanted to get rid of breadsticks all together. That’s not the case.
As an activist fund, Starboard’s main investment thesis is to find undervalued small-cap companies and actively engage with management and boards to unlock value.
Smith’s Starboard Value launched in 2002. The fund currently manages around $US2.3 billion in assets.
He’s had some noteworthy shareholder activism campaigns. He took on AOL, but lost his proxy fight. He also took an activist stake in Office Depot with later merged with OfficeMax (He resigned from the Office Depot board the other day).
According to Institutional Investor, Smith has made money on 84% of his fund’s activist campaigns.
Before launching his own fund, Smith was a managing director at Ramius LLC (both the head of risk management and head of research at Starboard also worked at Ramius). Before that, he was a Vice President of Strategic Development for The Fresh Juice Company. He began his career in finance working in M&A at SocGen.
He graduated from the University of Pennsylvania’s Wharton School of Business.