The Wall Street Journal is reporting that activist hedge fund Relational Investors plans to close by the end of the year, as co-founder Ralph Whitworth battles throat cancer. From the WSJ:
Relational Investors LLC, the veteran activist investment firm, plans to wind down its operations and dissolve its current funds by the end of next year, according to people familiar with the matter.
The decision to liquidate the $6 billion activist-investment firm’s current funds came after Ralph Whitworth, the co-founder and public face of Relational, learned his throat cancer had recurred, the people said. In July, Relational said Mr. Whitworth, 58, was taking a leave of absence.
Plans remain fluid and the ultimate status of funds and positions in them will be sorted out over the next year or so, the people said.
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The firm’s executives expect in 2015 to launch a new fund with the same name, though founders Mr. Whitworth and David Batchelder will cede day-to-day control, the people said.
The big question now: What impact will the closure happen to the fund’s biggest stock holding? As an activist investor, Relational doesn’t take many small positions. It holds 1.5% of Hewlett-Packard (HPQ) shares, for instance, 15% of SPX Corp. (SPW), 3.5% of B/E Aerospace (BEAV) and 4.6% of Timken (TKR).
With the market getting pounded today, it’s hard to tell how much of the heat those stocks are taking is because of the news and how much because just about every stock is getting hit today. Hewlett-Packard has fallen 2.5% to $34.59 at 2:56 p.m. today, while SPX Corp. has dropped 5% to $89.22, B/E Aerospace has declined 2.8% to $81.60 and Timken is off 1.9% to $41.59.
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