Mr. Robert Chapman is the founder of Chapman Capital, a $300 million takeover and turnaround shop based in Los Angeles. He suffered an accident while surfing in October 2003, and came back with two new hedge funds. After the mishap, he gave back money to his investors in Chap-Cap, a fund that produced a 20% annual performance from 1996 to 2003, and started a journey that covered as many as 49 nations. Mr. Chapman continued to manage an activist side pocket during his sabbatical with a net return of 55% and 61.9% in 2004 and 2005, respectively. He is also the colorful founder of the “13-D filing” that most activist hedge funds prefer to use these days. Over the last decade, Chapman Capital has worked successfully for the restructuring or sale of more than 20 publicly-traded companies. Later, he launched a tightly hedged, long/short fund called Chap-Cap Partners II, replicating his first fund and also a highly concentrated activist fund named Chap-Cap Activist Partners.

One of Mr. Chapman’s most successful deals was USA Detergents. By persuading the company to sell itself to Church and Dwight within just six months of our original 13D filing, his company got an absolute return of over 132% and an annualized return on invested capital of over 264%. This feisty activist once remarked that there are about 11,000 public companies in America alone, at least 10% of which are potential activist targets managed and overseen by executives and directors whose replacement, through 13D filings, proxy fights or company auctions, would result in the doubling in stock price upside that Chapman Capital seeks in its activist targets. When asked what lessons he learned while on sabbatical, his response was: “Two lessons: Capitalism is contagious and a global inevitability; and China's economy is no miracle. Combine thousands of years of pent-up consumer demand with a government allowing businesses to have near-zero environmental and labor costs, and you get the world's next hegemony.”