Nelson Peltz: Junk bond activist

Zing Tsjeng (0:07)

It's the year 2000, and we're in a 130-acre estate in Bedford, an exclusive town in upstate New York.

Simon Jack (0:14)

It's the start of the day, and everyone knows it because of a noise as regular as church bells or a cockerel crowing. The 80 decibel blast of helicopter blades whirring up into the sky at the start of a journey 40 odd miles south to Manhattan.

Zing Tsjeng (0:28)

In the back of his own personal blue and white six-seater Sikorsky helicopter sits Nelson Peltz, a man who is very rich indeed, but who is not popular, at least not in this neighborhood. For the past decade, he's been flying in and out of town to commute to work, ignoring local regulations, and the many, many complaints from his neighbors.

Simon Jack (0:47)

He spots one of them as he glances down from his window. They look up, shaking their head angrily. Nelson grins back and waves. They're just jealous, he thinks.

Zing Tsjeng (0:56)

Welcome to Good Bad Billionaire from the BBC World Service. Every episode, we take a billionaire and we find out exactly how they made their money.

Simon Jack (1:02)

We take them from zero to a million, and then from a million on to a billion and beyond.

Zing Tsjeng (1:07)

I'm Zing Tsjeng, and I'm a journalist, author and podcaster.

Simon Jack (1:10)

And I'm Simon Jack, and I'm the BBC's business editor.

Zing Tsjeng (1:13)

And on this episode, we have an American investor with an current estimated net worth of $1.6 billion, according to Forbes magazine. His name is Nelson Peltz.

Simon Jack (1:23)

He's 84 now. He made his money from junk bonds, corporate raids, leveraged buyouts, more detail on all of that later, and activist investing, all of which are controversial. Stick around for an explanation, as they say, of what those terms really mean. Suffice it to say, he's a man who likes shaking up boardrooms and putting his stamp on companies. And often those companies are very famous indeed. We're talking Heinz, Procter & Gamble, Cadbury, Tiffany & Co, PepsiCo, Snapple. And Nelson has some interesting personal mottos. One of these is, I'd rather be rich than right. And according to his business partner, May, the meaning behind this saying is, let's try stuff and it doesn't work, let's go and do the next thing.

Zing Tsjeng (2:04)

Another one of Nelson's mottos is reportedly, just make a pain in the ass of yourself. They don't teach persistence in business school.

Simon Jack (2:10)

Well, he has certainly been a pain in the ass to a number of companies, but he's often made them and himself richer as a result.

Zing Tsjeng (2:18)

And his profile has risen in recent years due to a very unlikely source. One of his ten, yes, you can count them all, children.

Simon Jack (2:26)

Yes, his daughter Nicola married into celebrity when she became the wife of Brooklyn Beckham, son of Spice Girl Victoria and footballer David, who he had a very high profile falling out with.

Zing Tsjeng (2:37)

Well, Nelson has stayed tight lipped on the whole matter, saying his advice to Brooklyn Nicola was to stay the hell out of the press. He added, how much good did that do? Good question.

Simon Jack (2:47)

But Nelson himself has not always avoided publicity, as we will see. Sometimes he's used it to his benefit. So let us go back to the start and take Nelson Peltz from zero to his first million.

Zing Tsjeng (3:02)

Nelson Peltz was born in June 1942 in Brooklyn in New York City. He's the youngest of three siblings. He's got a brother and a sister, all born to his mother, Claire.

Simon Jack (3:12)

His father Maurice ran the family's food business, A Peltz and Sons, which had been founded by Nelson's grandfather, Adolf, in 1896 Adolf started out selling apple slices door to door, but he grew the business into a food service company that Maurice took over in the 1930s.

Zing Tsjeng (3:29)

After World War II, when Nelson was still a child, Maurice focused the business entirely on frozen food distribution. And young Nelson did respect his father's dedicated work ethic because his dad began work at 4.30am each day to catch the early produce markets. And while Nelson has described his upbringing as middle class, the business was doing pretty well with a turnover of around two and a half million dollars a year, which was a lot in that era.

Simon Jack (3:54)

A lot in that era. Middle class doing a lot of work in that sentence. The Peltzes were also pillars of the local Jewish community. His grandfather had founded the local synagogue in the 1930s where the family continued to worship. And young Nelson went to what Americans call public school, Brits call state school until his teens when his parents sent him to a private prep school in the Bronx.