Easier.com – Francois Barthelemy, partner at F&C Partners LLP, the fund of hedge funds business, has expressed surprise at comments made this week by Joop Wijnt, the Dutch minister for theeconomy. In an outburst on Dutch radio Joop Wijnt accused certain investment funds of behaving like “locusts” following calls from two hedge funds to break up supermarket group Ahold. The two hedgefunds in question, Centaurus Capital and Paulson & Co, have built a stake of 6.4% in the €11bn company and argue that by restructuring the group could increase its valuation by a further €3bn.Barthelemy said the real issue at stake was whether the hedge funds as shareholders had the right or indeed the duty to make sure the management teams they had hired were doing a good job of managingtheir assets.
“Doing a good job is primarily about producing healthy, sustainable financial returns. Shareholders and not managers (or government ministers) are the owners of the business which makes a robustcorporate governance process crucial to ensure management are truly accountable. We think it is healthy that managers of companies have to report to their shareholders and are accountable for theiractions. There is an abundant list of cases where poor management has been allowed to mismanage businesses for so long that they eventually go bankrupt. In fact, Ahold is a great case in point.Historic mismanagement of the group has led to false accounting in the US subsidiary and the near demise of the company. It is wrong for the management of a company to refuse to meet with largeshareholders and it is equally misguided for a government minister to make comments that are clearly against the principles of established good governance,” he said.
