As a steward of pension funds and retirement accounts, Neuberger Berman has traditionally employed a staid strategy familiar among big Wall Street money managers: Buy and hold stocks, sit back, and hope for the best.
But recently, the firm eschewed its nearly 80-year-old tactic of playing nice.
Last year, as Neuberger Berman's roughly $200 million investment in Whole Foods Market languished, the firm quietly approached some hedge funds and urged them to agitate for change at the high-end grocer.
Two weeks ago, Jana Partners took up the fight.
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Jana — an $8.5 billion hedge fund behind some of the most high-profile recent corporate shake-ups — announced it was the second-largest shareholder in Whole Foods and blasted everything from the financial nuts and bolts, to the scheduling of employees and even the behavior of top executives. In a flash, Whole Foods' shares jumped 10 percent, adding millions of dollars to the value of Neuberger Berman's stake.
Neuberger Berman's behind-the-scenes campaign to shake up Whole Foods is the latest example of a dynamic that is upending relations between public companies and the big investors that own their stock.
For decades, Neuberger Berman — which invests some $267 billion for pension funds, sovereign wealth
But these two worlds are increasingly colliding in showdowns at companies including Dell, Microsoft and now Whole Foods, a reflection of the shifting balance of power on Wall Street.
Traditional money managers in search of market-beating returns are demanding a seat at the table, turning to activists for help and even employing some hedge fund tricks of their own. And activists, once the black sheep of the investment world, are now accepted as
Do companies "really listen to the feedback they get from their mainstream investors?" said Michelle Edkins, global head of corporate governance at BlackRock. "I think they are certainly making an effort to listen more."
But activists, she added, "can act as an important 'check and balance' on management that has lost its way."