Jim Osman – The Edge Consulting Group – On Special Situations

ValueWalk’s Raul Panganiban interviews Jim Osman, the founder and CEO of The Edge Consulting Group.

Q3 2019 hedge fund letters, conferences and more

Interview with Jim Osman

Transcript

Hello podcast listeners. Today’s a very special episode with Jim Osman, the founder and CEO of The Edge Consulting Group. Before this, he was a special situations Portfolio Manager at Claridge Capital Management. He’s also a frequent contributor to Forbes, for hedge funds and private equity. In today’s episode, we discuss his thoughts on activism, catalyst investing, and his new book coming out. I want to welcome Jim to the show, and I want to welcome all the listeners to a very special episode.

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Welcome to value talk with Raul.

Alright, so I just wanted to welcome all and listeners to a very special episode of Jim Osman, founder and CEO at The Edge Group Jim, welcome to the show.

Thanks Raul, and great to catch up with you again. It’s been a while since we’ve done one of these and a real pleasure to be on to talk to your listeners.

All right. Yeah. Welcome back to him. And for the new listeners, can you provide me a quick intro?

Yeah, sure. So I run a company called The Edge Consultant Group. Now The Edge has been around about 12 years. We look into any sort investments that we can find in the public markets that display some sort of characteristic of being or having a catalyst event with them. So it could be a spin off, could be a directors change could be a management change could be restructuring. Anything that we believe will move price to value. Sadly, in this world, there’s plenty of stocks around for people to choose from, but ultimately, what is going to make them move and we view back catalyst event with them. The thing to make the move so so that’s how we source investments for our for our clients. And that’s what we do at The Edge. And the other half of our business. We’ve, you know, in the last two, three years, I guess, since we spoke will be more looking at sourcing activist investments. We’ll talk about a little bit about that in a second. But obviously, a lot of companies these days, we need to change as well. And we try and source those ideas for the activists out there. And we bring them investments which we think according to their expertise, they can maybe change the company around and create some value and we had a very good one recently our conference, but we could we could discuss that.

Yeah. And you recently had your conference about three weeks ago and the benefits go to supporting Alzheimer’s. Can tell me about the conference headwinds and then also, why Alzheimer’s as well?

Yeah, absolutely. So so have an interest in the in the disease’s effect me personally, my family and [inaudible]. We started around year and a half ago, having these conferences and I just felt there was a need out there for to raise money for the diseases, these diseases effects in the brain, your listeners will know, but it affects one in 10 people. So it was serious and there is no cure at the moment. And we all need our brains. And, you know, it’s one of those things where, you know, I saw one of my family members kind of melt away really, in terms of in terms of our brain and I felt the need to hold a conference to do this. So we sell these conferences, we invited some of our clients, some of fun managing clients and activists to present ideas, but we don’t charge for those conferences. And we just ask people to make a donation and 100% of those discretionary donations. Go to the charity and ultimately, the audience come away with some great ideas and the charity benefits. And maybe we get a little bit of business on the back of it too. So it’s a win situation, which is one of those rare occurrences these days. So, so that was our that was our third conference we held and it was successful again, and we’re looking to hold another one in March.

What are some of the ideas that were presented at the conference and who are some of the speakers?

Well, yeah, on this one, we will look at, again, catalyst events from different fund managers, and one of the ones that we like I said, we become a more involved in or the fund managers we become more involved in this with the activists and one of the activists who are involved in the stock that your listeners will well know is Bed Bath and Beyond. Now Bed Bath and Beyond have had real troubles. It’s a retailer of course and we all know about the retail apocalypse but the struggle with the stock. It was it was many felt really in terms of the way they marketed in terms of the way they bought in stock. I mean, if I could tell you one of the problems straight off the bat with Bed Bath and Beyond was the fact that each individual store brought in their our stock, which is crazy for a chain, because our money, you you’re huge and you buy bulk when you reduce your costs, I mean, so there was a number of those problems along the line in terms of that store, and the activists who presented at the conference, got into stock to look to change all that really. And indeed wrote that idea up on an article in Forbes few weeks beforehand, but the stock has gone from from 14, 13 or even 12 to 18. Today, and you know, the changes taking place. So that was one of the ideas and it gives the gave the readers listeners 10 days, a real insight into the way activists operate and I as important for investors to understand really, because nowadays again, if you if you away from this value invest in numbers game, which I totally am, you can see, you can see the way other people