Jana’s Rosenstein Says Private Equity’s Deal Role Diminished

May 14, 2014 7:41 pm ET

(Updates with comments starting in second paragraph.)

May 14 (Bloomberg) -- Barry Rosenstein, founder of Jana Partners LLC, said mergers and acquisitions are different from 10 years ago in part because there is less involvement by private-equity firms.

“Private equity was the winning bidder” in the past, Rosenstein said at the SkyBridge Alternatives Conference in Las Vegas today. “Today, as mergers and acquisitions are back, you see a lot more strategic acquisitions, which is healthier.”

Another change affecting the current deal cycle is that corporate balance sheets are more efficient as companies hold record cash levels, Rosenstein said. He also cited healthier markets; less leverage, or borrowing, in the financial system; and low interest rates.

“No company is safe today,” Rosenstein said.

Jana, based in New York, is among activist investment firms that often push for change in companies to boost share prices.

The hedge-fund manager said institutional shareholders are “engaging with us on ideas.” They would be viewed as irresponsible today if they didn’t engage with activists, whereas years ago it was “hard to get them to answer your call,” he said.

“Back in the ’80s, corporate raiding was a game that was all about tendering a position to buy a whole company to get all the benefits,” Rosenstein said. Now, “activists propose changes that benefit all shareholders.”