Jana Partners is an activist hedge fund founded by Barry Rosenstein in 2001. The fund specializes in event-driven investing by applying a fundamental analysis to identify undervalued companies in the market. The firm also engages in activist investing that can potentially serve as an event-driven, fundamental investing catalyst. Jana Partners is based in New York. The fund manages around $5.35 billion with $3.78 billion in 13F equity holdings as of June 30, 2018.
Rosenstein graduated from Lehigh University and received his master’s of business administration from Wharton. He started his career at Merrill Lynch. Rosenstein worked with Asher Edelman, a prominent corporate raider during the 1980s. The character of Gordon Gekko in the film "Wall Street" was modeled, in part, on Edelman. Rosenstein left New York for San Francisco in the early 1990s. While in San Francisco, he had initial success with the funding of Copart, Inc., the largest auto salvage company in the world. Rosenstein then ran a private equity firm, Sagaponack Partners, but he found the private equity structure to be too limited. Rosenstein began Jana Partners in 2001 with around $17 million in backing from Leon Cooperman, a prominent hedge fund manager. Rosenstein is now one of a group of elite activist investors that includes Carl Icahn, Daniel Loeb and Bill Ackman. Rosenstein’s investment management team at Jana Partners includes David DiDomenico, Scott Ostfeld, Charles Penner, Sam Assamongkol, Kevin Galligan and Daniel Hanson.
As of June 30, 2018, the firm had a quarterly portfolio return of 7.49% and a 12-month return of 11.2%. These returns have matched the S&P 500 with a second-quarter return of 5.3% and a 12-month return through June 30, 2018, of 11.9%
Jana’s Activist Positions
Jana has taken a number of large positions in companies over the years. Rosenstein took a large position in McGraw-Hill and successfully pressured the company to break into two. Jana also convinced energy company El Paso to break up into two companies. Other significant investment positions have included Qualcomm, ConAgra Foods and Baxter. As of June 30, 2018, Jana’s two largest equity positions now include Pinnacle Foods (PF) and Zimmer Biomet Holdings (ZBH).
Pinnacle Foods is Jana’s largest investment as of June 30, 2018. Pinnacle focuses on manufacturing and distributing branded food products. Jana has an 8.57% stake in the company representing 17.6% of Jana’s portfolio. PF has a year to date return of 9.63% through September 28, 2018 trading at $64.68. Jana Partners has reported an average investment price of $59.97.
Zimmer Biomet Holdings
ZBH is the second largest holding in the Jana portfolio. The company focuses on the manufacturing of medical devices. As of June 30, 2018, the stock represented 8.40% of Jana’s portfolio. Jana holds 1.4% of Zimmer’s outstanding shares. Year to date ZBH has a return of 6.25% through September 28, 2018 trading at $131.81. Jana has reported an average investment price of $124.84.