Carronade Capital Management, an East Coast hedge fund, has criticized Cannae Holdings, a holding company led by Bill Foley, owner of the Golden Knights, citing the need for significant changes due to a declining stock price and poor corporate governance. In a recent letter, Carronade, which owns about 2.9 million shares in Cannae, called for cost reductions, improved capital allocation, and the appointment of truly independent directors to the board.
Carronade has nominated four new board members, arguing that Cannae’s shareholders have been experiencing underwhelming returns and pointing out the existing board’s excessive interconnectedness. The hedge fund also expressed shock at the board’s recent actions, which included a buyback of half of Foley’s shares at a premium if he chooses to resign following the election of any director without his approval.
In response, Cannae stated that it has implemented a strategy aimed at long-term value creation, focusing on returning capital to shareholders, rebalancing its investment portfolio, and improving operations of its portfolio companies. The company claims to have made significant progress in these areas, including repurchasing 35 percent of its stock since 2021 and raising substantial funds through portfolio stock sales. Despite Carronade’s criticisms, Cannae believes its current strategy will provide better long-term returns for shareholders.