The Childrens Investment Fund Management, the aggressive hedge fund that last year waged a fierce and successful fight to install new directors on the CSX board to reshape the railroad, no longer holds a stake in the company and will soon shed a board seat.
TCI sold about 17.8 million shares in several trades April 20-22, at prices of $30.09 a share to $28.3, according to filings with the Securities and Exchange Commission. After that, TCI Managing Partner Chris Hohn held only 5,150 shares as a CSX director.
Hohn earlier said he will not stand for re-election to the board in its May 6 annual shareholders meeting, and CSX said it would shrink the number of board positions to 11 from its current 12 seats upon his departure.
TCI and another fund, 3G Capital Partners, last year lobbied other shareholders for proxies to install a five-person board slate, which included the heads of both funds plus nominees with transportation sector experience and some who specialized in freight rail operations.
They argued that CSX Transportation had underperformed in its rail operations and could generate more value to customers and investors. CSX officials, led by Chairman, President and CEO Michael Ward, argued that CSX had in fact greatly increased its returns and wanted to re-install 11 current directors plus one the board chose to replace a retiring member.
In the end, a delayed election gave the TCI-3G group four seats and ousted some sitting CSX directors, and the fund group survived a CSX court challenge against their role in the election. But the hedge fund industry soon suffered losses from the financial collapse, and Hohn let CSX know he would leave the board to focus on TCI’s investments.
A TCI partner who was a specialist in U.S. rail issues, Snehal Amin, reportedly left the fund earlier this year as well. He had led the fight for CSX board seats, and appeared last year before a congressional hearing that reviewed the hedge fund’s effort.
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