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WisdomTree Faces Major Shareholder Rebellion

WisdomTree’s largest shareholder seeks to seize control of the board of the $90.7 billion U.S. asset manager, ousting both the chief executive and chairman in an increasingly heated dispute over strategy.

WisdomTree founder and CEO Jonathan Steinberg plans to launch a blockchain-enabled digital asset platform this year, but his plans have been opposed by its largest shareholder, Graham Tuckwell. and argued that the company should concentrate on its core fund administration business. improve its operational performance.

Tuckwell, the driving force behind the creation of the world’s first gold exchange-traded fund, has been elected to the board of directors alongside exchange operator Nasdaq former vice chairman Bruce Aust and Pareto managing partner Tonia Pankov. it was done. Advisors, investment management consultants.

At the annual shareholder meeting in June, six board seats will be voted on, including positions held by Steinberg and Frank Salerno, WisdomTree Chairman since 2019.

Founded in 1988 as an investment magazine publisher, Steinberg believes the adoption of blockchain-enabled technology is critical to the company’s future success, and later oversaw its development into an ETF provider in 2006. Did.

He argued that the investment in developing the new WisdomTree Prime platform would not undermine the company’s core ETF business, which attracted $12.2 billion in net investor inflows last year. The strong momentum continued in the first quarter, with net inflows reaching his $6.3 billion and assets under management reaching all-time highs.

Steinberg joined the FT in 2018, working for WisdomTree Assets reach $100 billion The currently displayed goal without specifying a timeframe.

UBS upgraded WisdomTree to ‘buy’ this week, raising its 12-month price target from $6 to $8, reflecting the manager’s “consistently strong” net inflows. He closed at $6.25 on Wednesday, and he’s up 14.8% so far this year.

“Investors appear to be underestimating WisdomTree’s value as an independent franchise,” said Brennan Hawken, an analyst at UBS in New York.

Steinberg told the FT last year that he was acutely aware that his leadership was under attack.

“I was taught to win with honor, lose with honor, and never cheat,” he said, giving a counter-argument that underscored the anguish between him and Tuckwell.

The controversy has been on the rise since WisdomTree acquired the European arm of the London-based ETF Securities, founded by Tuckwell in 2005, in November 2017 in a $611 million cash-and-stock deal. It’s noisy.

Both men believed the deal would allow WisdomTree, then the world’s ninth largest ETF manager, to compete more effectively with larger rivals such as BlackRock and Vanguard. We also hoped that this combination would enhance WisdomTree’s appeal to potential acquirers. However, no buyers have emerged for the group and the share price has fallen about 38% since the deal closed in April 2018.

Australian entrepreneur Tuckwell said WisdomTree needs to focus on its core ETF business and needs a board overhaul to deal with “disastrous” stock performance.

Tuckwell is also furious that WisdomTree has revived the complex.Shareholder Benefit Program– including non-voting preferred stock issues – designed to prevent him from gaining control without paying a premium.

WisdomTree’s board has “repeatedly refused to engage in meaningful dialogue or make any offers or suggestions that could help reach some form of settlement,” Tuckwell said. I’m here.

He also opposes WisdomTree’s decision to approve an expanded retirement plan to include eight executives that could collectively raise an estimated $25 million if their contracts end. Steinberg was able to walk away with an estimated $9 million under a retirement plan.

WisdomTree’s Salerno chairman said Mr Tuckwell “wants a blank check” to change the board to suit his personal agenda.

“Contrary to Mr. Tuckwell’s misleading claims, WisdomTree’s strategy has clearly led to strong results,” he said.

https://www.ft.com/content/21f80b52-64f9-4238-b7e3-16d324cb6fe6 WisdomTree Faces Major Shareholder Rebellion

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