Eric Rosenfeld's career as a singing shareholder activist began in 1999 when he belted out My Way to directors of Spar Aerospace Ltd. upon settling a crucial legal battle.
"People were very quiet at first because they didn't know how to react," said Colin Watson, Spar's former chief executive officer, who was at the meeting. "His songs are an extension of his aggressive nature."
Indeed, the 50-year-old New Yorker has been doing it his own, pugnacious way since the early 1990s, when he emerged as one of the first U.S. activists to buy stakes in undervalued Canadian companies for what could be called a song.
To his critics, Mr. Rosenfeld is a publicity-seeking flip artist who is merely interested in racking up short-term gains on distressed stocks. To his defenders, however, the brash investor is an original who shakes company boards that need to be shaken and earns big returns for all shareholders.
For Mr. Rosenfeld, singing is another way of throwing potential adversaries off balance by pursuing unconventional activist strategies. His brand of action is one of several that Canadian public companies will soon be facing as swooning stock prices and shareholder friendly corporate laws draw aggressive U.S. activists to undervalued local companies.
"We are seeing more activist forces migrate to Canada," said Jonathan Levin, with Fasken Martineau DuMoulin LLP. "Canada is becoming fertile ground for activists."
If the past is any indication, Mr. Rosenfeld can be expected to stage some of the more dramatic corporate rebellions. To drive home the point that he plays outside the traditional corporate sandbox, he arranged to meet a reporter recently at a Toronto Tim Hortons.
While snacking on a sprinkle-covered doughnut and caramel smoothie, the slight man with a medium build, closely shaved red curls and an impish grin explained the motivation behind his musical performances.
"There are probably some people who think it's ridiculous that I sing ... I've always followed my own path and the lyrics are my way of making a point about what I do."
Regardless of what you think, it would be a mistake to ignore Mr. Rosenfeld's voice. Experts are bracing for a new wave in proxy battles and board room challenges from big investors who are under pressure to boost returns in a fragile economy. With the mergers and acquisitions boom all but dead, the anticipated rise of activism is expected to trigger more executive turmoil, asset sales and cutbacks.
Since the August meltdown in credit markets, Mr. Rosenfeld said, "the pace of disappointed shareholders calling us has accelerated."
Mr. Rosenfeld first learned to be an activist as a Wall Street arbitrage trader looking for plays on distressed stocks. Shortly after his firm was purchased by Canadian Imperial Bank of Commerce in 1997, he launched his hedge fund, Crescendo Partners. The fund's name marries his professional strategy of escalating pressure on laggard companies with his childhood passion for showy Broadway musicals.
By pushing for improved returns through arm twisting or proxy and court battles, Mr. Rosenfeld has made a fortune targeting Canadian slowpokes Spar, WIC Western International Communications Ltd. and Geac Computer Corp. Ltd.
Nine years ago, Mr. Rosenfeld felt good enough about his wins to start crooning about his rebellions. At business conferences, executive meetings and private dinners, he will catch attendees off guard by lowering the lights and singing, in a rich baritone, rewritten lyrics to Broadway tunes.
Mr. Rosenfeld is happy to lead the charge for big pension and mutual funds who prefer to keep to the background during corporate showdowns. Helping him are Canadian laws which make it easier for activists to unseat or demand changes from directors through proxy battles and other legal challenges.
If the experts are right, Mr. Rosenfeld will soon have more to sing about. The activist first fell in love with singing as a high school student in Long Island, N.Y., where he played the lead in several musicals. University and two demanding decades on Wall Street left him no time for his hobby. But 11 years ago he hired a voice coach for a year of lessons so he could serenade friends at his 40th birthday party. He has been singing ever since.
Mr. Rosenfeld is probably best known for his version of Get me to the Church on Time, which replaces the theme of marriage with his own investment religion: "I gotta be there in the morning/Ching ching the votes are gonna climb/ Kick out the old board/Hang 'em by a long cord/But get me to the vote on time."
"At first everyone thought it was a joke," recalls Craig Thorburn, a Blakes Cassels & Graydon LLP lawyer who heard Mr. Rosenfeld sing the song at a New York restaurant last fall. Mr. Thorburn was one of 35 lawyers, bankers and executives attending a closing dinner for the sale of his client Geac, a software company. "The reaction ranged from disbelief to 'man this guy is really good.' " David McAusland, a former lawyer for Mr. Rosenfeld who recently resigned as executive vice-president of Alcan Inc., said the activist's singing reflects his maverick approach to business. "Eric does not consider himself bound by a traditional intellectual framework."
He should know. In the early 1990s, Mr. McAusland helped Mr. Rosenfeld pursue such unorthodox legal challenges as a motion to dissolve media company WIC, when its board couldn't move beyond feuds with shareholders. "A lot of people thought it was ridiculous, but it was a catalyst that got everyone focused on solving the problems."
Mr. Rosenfeld isn't saying much about where his activism will take him next. But he is already writing a new song to capture the challenges companies are facing as banks shut off their lending pipelines and acquirers walk away from deals. On a recent flight from Calgary he wrote the following lines for the song Any Dream will Do, from Joseph And The Amazing Technicolor Dreamcoat: "Far far away/ Bankers were quaking/ And the deal was breaking/ Any loan will do/ I did my deal/ With financial sponsors/ They became monsters/ We have to sue."