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Mutual funds start to put their mouth where their money is

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Mutual funds start to put their mouth where their money is

(Reuters) – Corporate America’s biggest shareholders have traditionally been content with sharing their views on a company’s strategy privately with management.

FILE PHOTO: Logo of global biopharmaceutical company Bristol-Myers Squibb is pictured at the headquarters in Le Passage, near Agen, France March 29, 2018. REUTERS/Regis Duvignau/File Photo

But now some mutual funds are beginning to rethink their stance, amid pressure from investors for them to justify the fees they charge and a push to boost the performance of their holdings.

Wellington Management Company LLP’s decision last month to speak out against drug maker Bristol-Myers Squibb Co’s proposed $74 billion acquisition of Celgene Corp, calling what would be the largest-ever pharmaceutical takeover too risky and expensive, sent ripples across the investment world.

This is because these tactics have typically been the purview of activist hedge funds like Starboard Value LP and Elliott Management Corp, not a large institutional money manager like Wellington, with $1 trillion in assets under management.

But in the case of Bristol-Myers, Starboard spoke out publicly against the deal one day after Wellington unveiled its stance publicly.

Wellington’s vocal opposition to the deal is the culmination of some mutual funds gradually feeling more emboldened to publicly challenge a company’s strategy, asset management executives and corporate governance experts say.

“There has been a growing chorus among investors who want these firms to speak up. With Wellington speaking up, it is going to put pressure on the others to do the same,” said Lawrence Glazer, managing partner at Mayflower Advisors, which invests with Wellington funds.

In January, chemicals company Ashland Global Holdings Inc agreed to changes to its board after pressure from asset manager Neuberger Berman Group LLC, which has about $300 billion in assets under management.

T. Rowe Price Group Inc, which manages close to $1 trillion in assets, has opposed several acquisitions, including Michael Dell’s offer to take his eponymous computer maker private, because it felt the proposed deal undervalued the company.

Spurring on these funds to challenge companies publicly is the need to show their worth as so-called active money managers, picking stocks rather than just betting on indexes.

At a time their performance has been lackluster and many have struggled to keep up with their benchmark index, they are under pressure from index-tracking funds who are gaining more market share in asset management. These “passive” money managers charge investors far less, in part because they do not need the army of analysts and portfolio managers to make investments.

“More funds are willing to agitate in search of returns,” Mark Shafir, Citigroup Inc’s co-head of global mergers and acquisitions, said on Thursday at the corporate law institute conference organized in New Orleans by the Tulane School of Law.

RAMPING UP PRESSURE

Despite their deep pockets, taking a public stance on corporate strategy does not come easily to many of these funds, in part because they are unaccustomed to readying the kind of presentations aimed at swaying other shareholders.

For example, Wellington’s statement on Bristol-Myers Squibb’s Celgene deal was just four sentences long. By contrast, Bristol-Myers published a 46-page document defending its deal.

The world’s biggest active mutual fund managers, including Fidelity Investments and Capital Group, have preferred to use their influence discretely, taking advantage of their access to management to gain insight into a company’s strategy and offer feedback behind closed doors.

To stay on good terms with corporate management, large mutual funds have often been happy letting activist hedge funds agitate over a company’s perceived problems.

To be sure, even passive investors have started to pressure companies behind the scenes, especially on social, governance or climate change issues that a younger generation of investors cares more about.

For example, BlackRock Inc and Vanguard Group voted against management at oil major Exxon Mobil Corp in 2017 over its reluctance to disclose the risks it faced from climate change, and pressured weapons manufacturer Sturm Ruger last year over its refusal to publish a report about the safety of its products.

“Corporate America had better take note because the folks who actually pick stocks have finally decided to flex their muscles,” wrote Don Bilson, head of Event Driven Research at Gordon Haskett Research Advisors.

Reporting by Svea Herbst-Bayliss in New Orleans; Additional reporting by Ross Kerber in Boston and Mike Erman in New York; Editing by Greg Roumeliotis and Matthew Lewis

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Janet Jackson allegedly changes position on Glastonbury Festival poster after original placed her fourth

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Janet Jackson allegedly changes position on Glastonbury Festival poster after original placed her fourth

If there is anything Janet Jackson wants you to know about her, it’s that she’s always the headliner.

That’s what fans pointed out Monday when the singer, 52, shared the lineup for the iconic Glastonbury Festival this year – only Jackson’s version of the poster looked a little different from the original.

As it turns out, the lineup poster Jackson shared with fans on Twitter lists her name first among acts headlining the British festival instead of fourth, where it landed before the change.

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It’s unclear who made the alteration, but it seems the legendary pop star and her fans liked the switch. After posting the image with the caption, “Can’t wait to see you,” fans immediately shared their support for Jackson – with one Twitter user responding, “It appears someone corrected it so Janet’s name is first – as it SHOULD be…actually it needs to be at the very top, but I’ll settle.” Another user echoed the sentiment, writing that “Miss Jackson knows her worth.”

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When Glastonbury Festival tickets went on sale in October 2018, event organizers went on Twitter to share their gratitude after the event sold out in half an hour, as Billboard reported at the time.

“Tickets have now all sold out! We are blown away by the huge demand, looks like record numbers tried,” read the tweet. “Thank you for your patience and incredible support and for those of you who missed out, there will be a ticket resale in April.”

The Glastonbury Festival runs June 26-30, and although tickets are currently unavailable, organizers say any canceled tickets will be made available to the public on April 28.

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Mugshot of ‘Mama June’ released after drug arrest

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Mugshot of 'Mama June' released after drug arrest

The arrest of “Mama June” — a reality star who gained fame on TLC’s “Here Comes Honey Boo Boo” — went down just like every other  carried out by the Macon County Sheriff’s Office in Alabama, the sheriff said Tuesday.

June Shannon, 39, and her boyfriend, 43-year-old Eugene Doak, were taken into custody on Wednesday at a gas station in Alabama after deputies received a report alleging domestic violence.

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Sheriff Andre Brunson said the pair were heading home after a night of gambling. The two were sitting in Shannon’s vehicle when responding officers “found some drug paraphernalia and some other drugs in the car,” Brunson said at a news conference.

The sheriff said that Shannon “was very cordial, she was very nice and funny, of course, and we didn’t have any problem with either one” as she and Doak were taken into custody.

Shannon is best known for her series on TLC, in which she and her family starred in a show surrounding her daughter Alana Thompson, otherwise known as “Honey Boo Boo.” Shannon went on to star in her own show, “Mama June: From Not to Hot,” which followed her weight loss journey.

Despite her reality star fame, Brunson said he “wasn’t too familiar with Mama June and the whole TV series.”

“We tried to be fair to them as we do to everybody else with the confidentiality and all that stuff, but it’s public knowledge and public records and all that stuff at some point,” he told reporters. He said that the sheriff’s office “want to treat them the same and give them the same respect and privacy as we give everybody else.”

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Shannon and Doak were both charged with possession of a controlled substance and possession of drug paraphernalia, and Doak was charged with domestic violence, according to the sheriff.

He said the couple would be in court soon for their initial appearance.

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‘The Young and the Restless’ star Kristoff St. John’s cause of death revealed

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'The Young and the Restless' star Kristoff St. John's cause of death revealed

“The Young and the Restless” star Kristoff St. John died of hypertrophic heart disease, according to an autopsy report obtained by Fox News.

Other contributing factors included “myocardial bridging of left anterior descending coronary artery and the effects of ethanol.” The Los Angeles county coroner officially ruled St John’s death an accident.

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The 52-year-old, best known for his role as Neil Winters on the long-running soap opera, died on Feb. 3 in California.

TMZ said police responded to a call from friends who’d found the two-time Emmy winner dead at his San Fernando Valley home.

According to the gossip site, St. John was pronounced dead at the scene.

In this June 20, 2008, file photo, Kristoff St. John accepts the award for outstanding supporting actor in a drama series for his work on "The Young and the Restless" at the 35th Annual Daytime Emmy Awards in Los Angeles. 

In this June 20, 2008, file photo, Kristoff St. John accepts the award for outstanding supporting actor in a drama series for his work on “The Young and the Restless” at the 35th Annual Daytime Emmy Awards in Los Angeles. 
(AP, File)

In 2014, St. John’s personal life was marked by tragedy when his son with ex-wife and boxer Mia St. John, Julian, committed suicide while receiving treatment at a mental health facility. The family later sued the treatment center, alleging negligence, and the suit was settled, according to TMZ.

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Per the site, St. John was placed under a 72-hour psychiatric hold in 2017 after attempting suicide around the anniversary of his son’s death. At the time, Mia said reporting about her ex-husband’s “incident” were “inaccurate.”

“No parent should ever have to bury their child, and for those who do, it is a nightmare that haunts you forever. The death of our beloved son, Julian, has taken a toll on both of us. He is an actor and while he may appear whole on the outside, his heart is broken,” she told Entertainment Tonight at the time. She added, “Last week, an incident occurred, that pushed him to the breaking point, but was not accurately reported.”

She did not elaborate further but asked fans for prayers and support.

St. John is survived by his daughter Paris Nicole, whom he shared with Mia St. John. He is also survived by another daughter, Lola, who was born in 2003 while he was married to his second wife, Allana Nadal. The couple divorced in 2007 and he became engaged to Russian model Kseniya Olegovna Mikhaleva in September.

 Fox News’ Sasha Savitsky contributed to this report. 

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