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Barry Rosenstein: No chance stock-picking is dead

Antonio José Vielma
Barry Rosenstein: No chance stock-picking is dead

Reports of the demise of stock-picking are greatly exaggerated, hedge fund manager Barry Rosenstein said Thursday.

The Jana Partners founder and managing partner told CNBC's "Halftime Report" there is "no chance" active management is dead. He said it is "cyclical like any other bubble."

"It doesn't mean that data can't be helpful in terms of due diligence or portfolio positioning," he said. "But the whole market can't just be index funds and machines trading with each other."

Active equity funds lost $25.4 billion in August, while passive funds gained $16.4 billion, according to Morningstar.

Rosenstein said if that active-to-passive migration continues, it makes hedge fund activism "that much more important and creates great opportunities for us."

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The Jana Partners CEO recently reduced his stake and exited his position on the board of Walgreens (WBA). He said he runs an active portfolio and accomplished a lot with the company during his time there.

"I think that company is the perfect example of where activism and corporate management can come together and create tremendous value," he said.

Rosenstein said the term "activism" doesn't necessarily describe the company's approach. He said his hedge fund presents well-thought-out ideas that are empirically proven, and "they agree with us and are happy to have our involvement."

"As long as human beings are running public companies and as long as the current board dynamic exists, there's always going to be a need for 'activism,'" he said. "I think most management teams and boards are well-meaning, but sometimes they lose sight of the big picture and what needs to happen," he added.

Jana Partners' top holdings include: ConAgra (CAG), Alphabet (GOOGL) and Microsoft (MSFT). He said during the interview he is "out of AutoNation (AN)."

Rosenstein's Jana Partners hedge fund ended 2015 with a 5.4 percent loss. The drop marked its first down year since 2011 and only the third time it has lost money for the full year since it was founded 15 years ago.

New York–based Jana Partners oversees roughly $7 billion in assets under management.



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