Opportunity Partners

Robin  Greenwood; James  Quinn

Case | HBS Case Collection | January 2008 (Revised July 2008)

Opportunity Partners

Abstract

Philip Goldstein, the principal in a growing hedge fund and prominent activist investor, has taken a position in a Mexico-based closed-end fund. Following a hard-fought proxy contest in which he advocated for management to eliminate the fund's substantial discount, Goldstein earns a seat on the board of directors. Now he and the board are faced with the decision of how best to "unlock value" in the fund by delivering Net Asset Value to shareholders. The case, which provides rich detail on the workings of closed-end funds, invites students to examine the trade-offs among liquidating the fund, converting it to an open-end fund, or carrying out a self-tender offer. It also raises topics of fund selection and investing in country-specific funds such as Mexico.

Keywords: Investment Activism; Investment Funds; Business and Shareholder Relations; Value; Financial Services Industry; Mexico;

Format: Print

21 pages

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Citation:

Greenwood, Robin, and James Quinn. "Opportunity Partners." Harvard Business School Case 208-097, January 2008. (Revised July 2008.)

McDonald’s reported its fifth consecutive quarter of declining same-store sales growth in early 2015. Despite McDonald’s recent poor performance, Jonathon S. Jacobson, the founder and Chief Investment Officer of Boston-based Highfields Capital Management, had initiated a large position in McDonald’s stock. Jacobson and his team believed that there was enormous upside in McDonald’s stock if management successfully implemented what they perceived to be straightforward operational and financial changes. McDonald’s needed to return to its core competencies of producing quick and reliable burgers and fries. In addition, they believed that financial restructuring could unlock sizable value for investors. Jacobson and his team debated whether to more forcefully articulate their vision for the company and began drafting a letter to Andrew McKenna, McDonald’s Chairman.

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Opportunity Partners

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