Mantle Ridge Up to Nearly $2 Billion on CSX Play

保罗赫拉尔的新披风山脊活动基金，一辆专用车载在去年夏天推出的专用车辆后，他离开Bill Ackman的Sends Square Capital Management，几乎达到了20亿美元的标志，在上秋季筹集了约12亿美元。

Since then Mantle Ridge has made about $700 million in performance gains from its single investment in CSX Corp., the U.S. railroad, after convincing the company to hire Hunter Harrison as CEO earlier this year, says Kenneth Squire, the head of 13D Monitor, which tracks activist investors. There’s just one catch: Hilal has to hold onto those gains for years to get paid, and right now that is looking like a tall order.

A spokesman for Mantle Ridge declined to comment.

Mantle Ridge旨在仅在CSX中投资，希望重复Pershing Square’scoup at Canadian Pacific Railway, where the hedge fund won a proxy battle and installed Harrison to great success. Both Ackman and Hilal, who have been close friends since their college days at Harvard, served on the board of Canadian Pacific. As Harrison revamped the railroad, following a similar effort at Canadian National Railway, the stock soared 150 percent, and Pershing Square made $2.5 billion over five years.

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哈里森是加拿大太平洋的首席执行官，而铁路试图与CSX合并进入美国。但被唾弃。然后，它被遗弃了一个竞标，并与另一个美国铁路，诺福克南部的公司合并，之后海拉尔辞去了歌舞广场。在几个月内，他准备了Mantle Ridge，如果有必要，计划通过代理战斗进行CSX来安装哈里森，他同意离开加拿大太平洋。

Mantle Ridge began amassing a 4.9 percent stake in CSX late last year, and early this year Hilal began pressing the railroad to hire Harrison. To avoid a proxy battle, the company agreed in March, signing Harrison to a four-year contract. But to convince Harrison to leave Canadian Pacific, Mantle Ridge had to buy out Harrison’s remaining contract, which amounted to $84 million, so it asked CSX shareholders to pay Mantle Ridge back to avoid a departure by Harrison.

虽然这是一个有争议的决定，但股东同意支付8400万美元，领先的CSX股票到55美元的月份，比1月3日起高达35.89美元。它已经下滑至48.74美元 - 今年仍然增长36％。

Monetizing Hilal’s gains at Mantle Ridge could be harder than the success at Pershing Square, however. For one thing, the fund is set up as a special-purpose vehicle with private-equity-like terms. Mantle Ridge’s investors all have different terms, but typically SPVs charge between 10 and 30 percent above a hurdle. Mantle Ridge’s investors have a five–year lockup, and Hilal won’t get paid until that time, at which time his fund will sell its CSX stake.

Meanwhile, Harrison’s efforts to shake up the railroad in the same way he did elsewhere have not gone smoothly. According toa Wall Street Journal reportthis week, “Congestion, delays, and erratic service are hitting CSX.”

Even Harrison has admitted that his attempt to streamline CSX hasn’t been easy, and some employees are resisting his efforts to, among other things, get rid of naps that workers at U.S. railroads are allowed to take during downtimes. The railroad’s regulator, the U.S. Surface Transportation Board — which was asked by the Justice Department to oppose the merger of Canadian Pacific with Norfolk Southern — told Harrison it is concerned about “widespread degradation” of the service.

A spokesman said in a statement to Institutional Investor that CSX is “transitioning to a new operating model,” which it acknowledges has created “unintended effects” for its customers. “CSX has acknowledged these issues, and we are committed to working through and resolving them as quickly as possible,” the spokesman added.

Sources also say it’s unclear whether the 72-year-old Harrison, who is often working remotely from his home in Florida, can perform the same magic he pulled off at Canadian Pacific and elsewhere. A health scare unnerved investors in Canadian Pacific two years ago, and Harrison was seen tethered to an oxygen machine at the annual CSX shareholder meeting in June. At the meeting, Harrison assured investors that his doctor had cleared him to work and that the board of directors was “fully apprised” of his condition, but he did not disclose what it was.

“哈里森先生以来，哈里森先生仍在积极而深入地涉及每天负责监督CSX管理和运作的各个方面，并在本组织的领导和方向提供领导和方向，”在该声明中表示。