EXCLUSIVE: Activist hedge fund Trian targets insurance company Allstate

Nelson Peltz is a founding partner of Trian Fund Management LP. Speaking at the WSJD Live conference in Laguna Beach, California on October 25, 2016. REUTERS/Mike Blake/File Photo Obtaining licensing rights

Oct 16 (Reuters) – Nelson Peltz’s activist hedge fund Trian Fund Management has built a stake in Allstate Corp (ALL.N), one of the insurers struggling to deal with the fallout from natural disasters such as the Maui wildfires in Hawaii, people said. Informed people. With the order he said.

The move could increase pressure on CEO Tom Wilson, who has led Allstate since 2007, to turn around the Northbrook, Illinois-based company after five quarters of losses. It has blamed natural disasters, sometimes exacerbated by climate change, for its poor performance.

Allstate has hired investment bankers to advise it on how to deal with Trian, the sources said. Trian’s stake and exact plans for Allstate cannot be known.

The sources spoke on condition of anonymity because the matter is confidential. Allstate and Trian did not immediately respond to requests for comment.

Allstate shares jumped 6% on the news to $127.46 in Monday trading in New York. Before news of Trian’s involvement, Allstate’s stock price had fallen 9% year-to-date, far underperforming the rising S&P 500 Property & Casualty Insurance Index (.SPLRCINPC), due to its exposure to property and auto losses. insurance.

Like many insurers, Allstate has not raised its premiums fast enough to cover losses it incurs by paying for large natural disasters such as wildfires, while inflation has also made it difficult for it to cover replacement costs.

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Activist investor Carl Icahn built a position in Allstate two years ago, but has not publicly pushed for board seats or other major changes.

Trian, which recently overhauled its top positions and promoted two veteran employees, including Peltz’s son, Matthew, to co-chief investment officer, is already busy with another high-profile corporate battle. It relaunched its activist campaign against Walt Disney this month after dropping a challenge to the board earlier this year in the wake of the return of CEO Bob Iger.

Trian has previously pushed for change at companies such as Procter & Gamble (PG.N), Unilever (ULVR.L), and Invesco (IVZ.N).

(Reporting by Svea Herbst Baylis and David French in New York) Editing by Greg Roumeliotis and Rod Nickel

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