Nelson Peltz’s Son-in-Law to Seek Activist Cash After Trian Exit
(Bloomberg) -- Ed Garden is preparing to manage outside capital more than a year after leaving the activist firm he co-founded with his father-in-law, Nelson Peltz.
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Garden Investment Management registered as an investment adviser with the US Securities and Exchange Commission late last month, a step that will allow it to raise money from outside investors. The Greenwich, Connecticut-based firm, formed in July 2023, said it will employ an activist strategy at companies where there’s a “significant discrepancy” between market value and intrinsic value.
That means it could potentially compete with Trian Fund Management, the activist pioneer that Garden co-founded with Peltz and Peter May almost two decades ago. Peltz, a onetime Wall Street powerhouse who agitated for change at iconic companies such as Procter & Gamble Co. and Dupont de Nemours Inc., has struggled lately amid reports of internal strife at his firm, where assets under management have shriveled. In April, he lost a high-profile proxy fight for board seats at Walt Disney Co.
Trian declined to comment.
Garden Investment Management, which has yet to disclose the amount of assets it oversees, does business as Garden Investments. Ed Garden initially set up the firm as a family office to manage his personal wealth after leaving Trian in May of last year.
The firm will initially deploy Garden’s personal capital when making investments, turning to outside backers for opportunities that require additional funding, a person familiar with the situation said. Instead of raising a commingled fund, Garden Investments will ask investors to back his ideas on a case-by-case basis.
His departure was surprising because Garden, 63, was seen as the heir apparent to run Trian, given that he was already chief investment officer and much younger than his two partners: Peltz and May are both in their early 80s. While the Wall Street Journal reported in March that he left amid an internal power struggle and isn’t on speaking terms with Peltz, Garden has said that it was simply the right time to start his own firm.
“I was just at the point in my life and career where I wanted to do my own thing,” Garden told CNBC last year. “And Nelson and Peter were both very engaged, going out with their boots on, so to speak.”
Garden’s founding partners at his new firm include Brian Jacoby and Chad Fauser, both of whom were members of Trian’s original investment team. Jacoby and Fauser left Trian before Garden did.
One big difference between Garden and his co-founders at Trian: May and Peltz both have backgrounds in operating and turning around companies, while Garden has spent most of his early career on Wall Street, starting with Drexel Burnham Lambert, according to a November interview that Garden gave on the Welcome to the Arena podcast.
Garden said he was hired by Drexel after he went to the firm’s trading floor and asked the first manager he saw for a job. The executive told him he was nuts, only to change his mind after finding out that Garden had been the captain of his high school hockey team.
Peltz isn’t the only major activist to struggle in recent years: Carl Icahn and David Einhorn — a value investor who has taken activist positions in the past — have also been hit by capital declines. Bill Ackman, the head of Pershing Square Capital Management, another well-known activist firm, said in 2022 that he would employ a “quieter approach” after several public defeats at companies such as J.C. Penney and Herbalife Ltd.
“Plain vanilla” activism had become crowded and commoditized as a strategy, Garden told CNBC. The vast majority of activists are “balance sheet-centric,” he said on the podcast, meaning they focus on getting their targets to break up, sell themselves or take on debt to repurchase shares. Trian’s strategy, by contrast, had focused on improving profit through steps such as boosting growth and cutting costs.
“My goal is to compound capital,” Garden said on the podcast, adding that he believes the financial system has built up a lot of debt over the past decades that will soon reset at higher interest rates, making it unaffordable for borrowers, whether they’re individuals, companies or governments. “That is going to create opportunity.”
(Updates with additional background on investor in 12th paragraph.)
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