Ed Garden, chief investment officer of Trian Partners, is ecstatic over the new transition plan announced on Tuesday for DowDuPont to split up into separate companies.
“I think this is a fantastic outcome,” Garden said at the Delivering Alpha Conference in New York on Tuesday with DowDuPont CEO Edward Breen.
“The news today is culmination of taking two huge iconic chemical companies and putting them together and aligning the individual businesses to have focus and industrial logic. Each of them will thrive,” Garden added.
Activist hedge funds initially had issues with how the company would break down the firm into three separate entities: agriculture, materials science and specialty products. The company now plans to move businesses totaling more than $8 billion in annual sales from its materials science division to the specialty-chemical unit. The change announced on Tuesday roughly aligns with some of the hedge funds’ suggestions.
Garden also shared his views on the firm’s large position in General Electric.
“GE is a collection of very good businesses. Some are very cyclical and you’re in the bad part of the cycle [for them],” he said. “We need to improve the free cash flow and need to take out cost. I’m optimistic good things will happen. The free cash flow conversion is an issue. This should be 100 percent free cash flow converter.”
Trian Partners was founded by Nelson Peltz, Ed Garden and Peter May in 2005. It has more than $10 billion in assets under management and is known for its corporate activism.
– CNBC’s Tom DiChristopher contributed to this report.