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The activist investor behind the proxy fight against Engine No. 1 ExxonMobil is buying a stake in Siemens Energy and pushing the company to spin off its wind business.
Ananim Capital, which Charlie Penner co-founded last year and has amassed about $300 million, has launched an activist campaign against the German energy giant, according to people familiar with the matter.
The investment amount could not be disclosed, but one person said it was a “significant position” for the fund.
In a letter to Siemens Energy’s board seen by the Financial Times, Mr. Ananim said that while the company’s gas turbine and grid businesses are booming on the back of increased demand for power from artificial intelligence data centers, poor performance in its wind energy division is holding it back.
“Wind power still faces a very different and more difficult path ahead,” Ananim wrote in the letter, adding: “As long as these businesses exist, the company’s true value will likely remain obscure.”
Hedge funds call on Siemens Energy to launch a ‘strategic review’ of its wind business Siemens Gamesa © Alamy
Mr. Penner has a track record of successfully driving change in large companies with small investments. His biggest coup came in 2021 when he was the strategist behind the Engine No. 1 campaign against Exxon.
Despite owning only $40 million worth of Exxon stock (about 0.02% of the company’s stock), the hedge fund was able to convince large investors to support the campaign, ultimately winning three seats on the company’s board.
Prior to joining Engine No. 1, Mr. Penner spent 15 years at Jana Partners, one of Wall Street’s most prominent activist hedge funds. There he competed against giant companies such as Apple and McDonald’s. Ananym’s other co-founder, Alex Silver, previously worked at P2 Capital Partners.
The hedge fund is calling on Siemens Energy to launch a “strategic review” of its wind business Siemens Gamesa, which could include a spin-off of the unit it took full ownership of less than three years ago.
Ananim argues that the wind sector will benefit as an independent business because it will not have to compete for R&D investment with the other two sectors. Hedge funds believe the wind power business could be valued at 10 billion euros within two years, one of the people said.
Siemens Energy spun off from the Siemens Group in 2020 and inherited a majority stake in listed Siemens Gamesa. However, persistent problems in the business weighed heavily on Siemens Energy, and the company launched a tender offer to buy out minority investors in Siemens Gamesa in 2022.
The problem forced Siemens Energy to seek relief from the German government to shore up its order book.
Since then, the company has become a huge beneficiary of the data center gold rush that led to a surge in energy demand. However, state-sponsored support that ended earlier this year prevented Siemens Energy from paying dividends to shareholders until this year.
Siemens Energy said in a statement that it values ”constructive input to create sustainable value for our shareholders, employees, customers and partners.” The company said it expects its wind power business to be profitable next year and will continue to “diligently execute our plans accordingly.”
Ananim said in the letter that Siemens Energy’s management has made “significant progress” in its wind power business, but believes the company still trades at a discount to its parts value and is better off as an independent entity.
Ananim said in the letter that wind power has attracted other investors willing to bet on the industry’s long-term prospects and endure volatility.
Siemens Gamesa posted an operating loss of 1.4 billion euros before special items in the 12 months to the end of September.
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