Billionaire title insurance titan Bill Foley’s other big venture — Cannae Holdings Inc. — is under fire from an activist investor who alleges the company’s “vague and undifferentiated” approach to acquisitions and “egregious governance practices” have squandered nearly $1 billion in shareholder value.
Cannae — a Las Vegas-based investment firm whose holdings include a stake in the English Premier League soccer team AFC Bournemouth — lost out in a 2020 bid to acquire real estate data and technology firm CoreLogic.
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While the firm’s objectives include acquiring “technology-enabled platforms that are deeply embedded into client systems and provide mission-critical solutions,” Cannae’s portfolio also includes “single estate whiskey” maker Minden Mill Distilling and two money-losing restaurant chains employing more than 7,000 workers — Ninety Nine and O’Charley’s.
Activist investor Carronade Capital Management, which owns 2.9 million shares of Cannae, says it’s been engaged in private discussions with the firm’s management about reforming its corporate strategy and governance.
In December, Carronade notified Cannae privately that it intended to nominate four independent directors to the company’s board at Cannae’s 2025 annual meeting.
The dispute went public Thursday, with Carronade publishing a scathing letter accusing Cannae’s board of accelerating equity vesting for existing board members if they aren’t reelected, and requiring the repurchase of half of Foley’s shares “at a significant premium to market prices.”
The move — taken by Cannae’s board on March 14 and made public in a March 17 regulatory filing — “trounces shareholder rights” and “makes clear to us that Cannae has not been engaging in good faith dialogue despite our persistent and sincere efforts,” Carronade said in a letter made public in a press release.
Dan Gropper
Carronade — a Darian, Connecticut-based investment firm launched by industry veteran Dan Gropper in 2020 — wants Cannae to sell its interests in the publicy traded companies it owns and concentrate on improving the performance and valuation of the private companies in its portfolio.
“Despite a handful of successful investments in the past, the current portfolio of private investments is consistently marked at cost and the remaining investments in public equities have destroyed approximately $900 million of value,” Gropper claimed in the letter to Cannae’s board.
To Gropper, “a lack of strategic cohesion amongst investments and limited portfolio company disclosure weigh on investor confidence. There has been no clear investment narrative for shareholders to rally behind, as we consistently hear Cannae described simply as the Bill Foley co-investment vehicle.”
Cannae responded by outlining steps it’s taken to reduce management expenses and to better align the interests of key executives with those of shareholders by shifting compensation “primarily to Cannae stock.”
The strategic plan the company has already begun implementing “will deliver better long-term returns to our shareholders than the actions proposed by Carronade Capital,” the company said.
Bill Foley
“Our board of directors and management team remain dedicated to driving long-term value creation, and the efforts taken to execute the company’s strategic plan is a reflection of that commitment,” Foley said in a statement. “Importantly, we remain optimistic on the outlook for our portfolio companies and their significant embedded value.”
Shares in Cannae, which over the past 12 months have traded for as little as $15.99 and as much as $22.99, gained 3 percent after the proxy war went public Thursday, closing at $17.45.
Foley: CEO, CIO and chairman
Foley — who founded title insurance giant Fidelity National Financial (FNF) in 1984 and continues to serve as the chairman of the company’s board — is Cannae’s CEO, chief investment officer and chairman of the board.
Cannae was split off from FNF in 2017, with FNF contributing a portfolio of companies unrelated to its primary insurance and real estate operations. FNF remains the largest of the nation’s “big four” title insurers, generating $1.3 billion in profits last year. FNF also owns a stable of real estate technology companies, and companies that provide services to mortgage lenders and real estate professionals.
In 2020, Cannae teamed with Senator Investment Group LP in an attempt to acquire real estate data and technology firm CoreLogic. But after threatening to mount a proxy fight, the firms were outbid by Stone Point Capital and Insight Partners, which closed the deal for $5.9 billion.
Foley did not assume the CEO role at Cannae until last year after the company posted net losses of $428 million in 2022 and $313 million in 2023.
Last year, Cannae racked up a $305 million net loss — including $153 million in losses from its two restaurant chains, and $50 million in losses attributed to the company’s 47 percent stake in Black Knight Football Club.
Black Knight Football Club is a partnership led by Foley that owns and operates the English Premier League soccer team AFC Bournemouth, plus minority interests in teams in France (FC Lorient) and (Scotland Hibernian FC).
In its 2024 annual report, Cannae acknowledged that over the past five years, long-term investors have seen the value of their shares decline by almost half, with the company significantly underperforming its peers and the S&P 500 over that time.
$100 invested in Cannae 5 years ago worth $54
Source: Cannae Holdings Inc. 2024 annual report.
One hundred dollars invested in Cannae at the end of 2019 was worth only $54 at the end of 2024, while the same amount invested in the S&P 500 would be worth $197, the company noted.
Cannae boasts that its management team “has a proven track record of growing industry-leading companies,” working with and supporting management teams “of the companies we own in managing, operating, and growing their businesses in order to provide value for our shareholders.”
But Gropper claims Cannae’s investment strategy isn’t working — and that some of the company’s executives and board members have interests that conflict with those of shareholders.
“Management’s stated strategy consists of ‘improving the performance and valuation of our portfolio companies, making new investments primarily in private companies that will grow NAV [net asset value], and returning capital to shareholders,'” Gropper said in the letter to Cannae’s board. “Put plainly, management’s plan is not working. Cannae has a valuable collection of assets, but buybacks to date have failed to close the discount due to market concerns around overall strategy and perceived misalignment of interests between management and shareholders.”
Cannae’s biggest assets include ownership interests in business data and analytics provider Dun & Bradstreet Holdings; employee benefits administrator Alight Inc., payments platform Paysafe Limited, Sightline Payments Holdings, System1 Inc., Black Knight Football Club, Computer Services Inc., Watkins Holdings, JANA Partners Capital, High Sierra Distillery (“Minden Mill”), AmeriLife Group, O’Charley’s Holdings and 99 Restaurants Holdings LLC.
Cannae sold its stake in mortgage product and pricing engine Optimal Blue to mortgage technology firm Black Knight in 2022 in exchange for shares in Dun & Bradstreet. FNF was a majority owner of Black Knight before spinning the company off in 2015 and divesting its remaining shares in 2017. Foley continued to serve as chairman of Black Knight’s board until 2021.
Cannae acknowledged in its 2024 annual report that risk factors to its business include the fact that “certain executive officers and members of our board of directors have or will have interests and positions that could present potential conflicts.”
Those Cannae executives and board members “serve on the boards of directors of other entities or are employed by other entities, including but not limited to Dun & Bradstreet, Trasimene, Alight, System1, BKFC, CSI, Minden Mill and Watkins.”
Foley, for example, also chairs the boards of Dun & Bradstreet and Alight.
Cannae said it’s already wound down its management services agreement with Trasimene Capital Management, a change that internalized all management and investment functions and “significantly reduced Cannae’s total management expenses, and further aligned incentives by shifting compensation for key executives primarily to Cannae stock.”
Cannae executives say they have been “rebalancing” the firm’s portfolio, raising $470 million through sales of public companies to “return capital to shareholders and make targeted investments.” Those sales have included:
- 10 million Dun & Bradstreet (DNB) shares sold in March 2024 for $101 million.
- 4 million shares in Dayforce for $264 million, exiting a position that generated $2.8 billion in returns, a fivefold return on Cannae’s investment.
- 900,000 Paysafe shares in November 2024 for $16 million
- 12 million Alight shares in December 2024 for $89 million
In the past four years, Cannae executives noted that they’ve spent $738 million to repurchase 35 percent of the company’s common stock, and are authorized to buy back an additional 12.3 million shares.
Foley said Cannae remains focused on “returning capital to shareholders and will utilize capital from the sell-down of existing public portfolio company holdings to further buy back our stock,” as part of the company’s commitment to boost the company’s share price and get it closer to “NAV” — net asset value.
Over the past three years, shares in Cannae have traded at an average 40 percent discount to NAV, “which places it in the bottom tenth of U.S. investment firms with assets over $500 million,” Gropper complained in his letter to Cannae’s board.
“A well-managed company with a strong asset base should not be trading at such a deep discount,” Gropper wrote. “We believe this misalignment points to a failure in capital allocation, strategic planning, and governance oversight.”
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