Marketwatch – Before a surfing injury derailed his investing career, Robert Chapman ran an activist hedge fund sporting annual returns of more than 20% in a seven-year stretch that included the market’s lean years after the dot-com crash.
Chapman, a 40-year-old former Goldman Sachs trader, shut the fund down and over the next 16 months embarked on a series of exotic adventures around the world, kite-boarding off the coast of Sardinia, hiking over southern Argentina’s Patagonia glaciers and trekking through Cambodian jungles.
In April, he re-opened Chapman Capital LLC with more than $300 million in assets, only to encounter yet another challenge. What was once a niche area with relatively few peers had since become crowded with an array of hedge funds all competing for activist opportunities using similar strategies.
“It’s supply-driven. There are fewer undervalued situations out there,” Chapman said. “The market’s gone up a lot since 2002 and we’re at the end of an economic cycle, not the beginning.”
Chapman has plenty of high-profile company that’s finding it harder to make their agitator-investor strategies pay off they way they used to. In the past year alone, the trend has hit its busiest pace yet, highlighted by a series of activist-led confrontations at big-name companies, like Carl Icahn’s assault on Time Warner Inc., and Nelson Peltz’s showdown with H.J. Heinz Co.
