Egyptian tycoon Nassef Sawiris has formed a partnership with US investor Mason Hawkins and his colleagues at Southeastern Asset Management to drive change at companies they invest in – and they have sportswear firm Adidas in their sights. The long-term venture between Sawiris and fellow billionaire Hawkins, founder of the employee-owned global investment firm, combines their personal wealth as well as cash from third-party investors, according to a source familiar with the matter. The new entity – Southeastern Concentrated Value – plans to build stakes in up to 10 European companies it deems to be underperforming – to spur boardroom revamps and influence strategy, the source said. It could set its sights on Germany’s Adidas, which has struggled to keep pace with bigger rival Nike in recent years and is currently looking for a successor to veteran CEO Herbert Hainer. Sawiris is already independently invested in Adidas via NNS Holding, which owned 1.74 per cent of the share capital as of October 30, according to Thomson Reuters data, and around 6 per cent of voting rights via a number of options. Southeastern has publicly filed as holding over 3 per cent of the company. The stakes were built up this year. A spokeswoman for Southeastern confirmed the existence of a partnership comprising Hawkins, Sawiris and some of its senior staff, but declined to comment further. Sawiris declined to comment. Sawiris’ and Southeastern’s interest in Adidas comes at a critical juncture for the Bavaria-based company. The German-dominated board is seeking a new boss who can help restore its fortunes in the US market, where sportswear trends are born. Many fund firms have demanded a greater say in how companies are run since the financial crisis, after clients accused them of charging high fees but failing to hold board members to account for weak strategy, poor profits or excessive pay. But investor-led campaigns for change can be stymied by the varying requirements of their clients, in terms of how soon they expect to see returns. Fund firms must often sell shares to return capital to clients before long-term change is fully implemented. SCV, which will be advised by Southeastern’s London office, is expected to focus on six to 10 companies at any one time and its partners hope their long-term collaborative approach will maximize shareholder influence, the source said. Sawiris, the youngest scion of one of Egypt’s richest families and Southeastern, the investment firm set up by Hawkins 40 years ago, have already cooperated as independent shareholders to significant effect at several large firms.
