The era of a few giant tech firms controlling stock market gains is quickly coming to an end, according to activist investor Nelson Peltz.
The founding partner of Trian Fund Management — which has taken stakes in companies including Kraft Heinz Co. and Procter & Gamble Co. — said a US recession is likely, but high-quality businesses with strong cash flows will emerge more valuable after years of taking a back seat to high-flying growth stocks.
“Those are the kind of companies that we invest in,” he said on an episode of “Bloomberg Wealth with David Rubenstein’’ on Bloomberg Television. “They're really wonderful companies that generate cash.”
Peltz, 80, is known for taking large equity stakes in underperforming corporations and campaigning for changes. This year, he joined the board of Janus Henderson Group Plc, an asset manager that has struggled to retain clients after shuffling through three chief executive officers in five years. He’s also built a stake in Unilever Plc and was recently appointed as a non-executive director.
“We see companies that were once great but have lost their way, and we have a plan for them to get back to greatness again,” he told Rubenstein, a co-founder of Carlyle Group Inc. “We're not there to do all the terrible things that typically go along with the term ‘activist.’ We're just trying to get these companies to operate better, the way they used to.”
Peltz’s path to becoming a finance titan was circuitous. He grew up in Brooklyn, with his father running a produce and frozen food distributorship in Manhattan. After high school he enrolled at the Wharton School of the University of Pennsylvania but dropped out after a year to become a “ski bum” in Maine.
“I was quite bored at Wharton,” he said. “I felt that was the wrong place. What I really wanted to do was ski.”
He eventually returned to New York and began working at the family business while investing on the side, using his bar mitzvah money and contributions from friends and relatives. He spent the next decade or so expanding the food distributorship through acquisitions before taking it public in 1973 and eventually selling it to a group of investors.
He started Trian in 2005 with partners Ed Garden and Peter May, and the New York-based firm has since completed 35 deals.
Peltz has 10 children, including daughter Nicola, who recently married Brooklyn Beckham, the son of former soccer star David Beckham and British singer-turned-fashion designer Victoria Beckham. An avid hockey fan, Peltz built a backyard ice rink for his kids, one of whom was drafted by the NHL’s Ottawa Senators. “I'm probably the only person you've ever interviewed that owns a Zamboni,” he told Rubenstein.
Peltz, who splits his time between New York and Palm Beach, Florida, said he’s not sure how much longer he’ll keep working, but his mother lived to be 108.
“I don't think I'll make it to 108,” he said. “But I don't plan on going anywhere too soon.”
For more insights from the biggest names in investing, watch “Bloomberg Wealth With David Rubenstein.” Peltz’s interview airs July 26 at 9 p.m. ET on Bloomberg Television. The following has been condensed and edited for clarity.