Voce says Argo ROE could double with cost cuts, nominates five directors


BEVERLY HILLS, Calif. (Reuters) – An activist hedge fund said on Tuesday that insurance company Argo Group International Holdings Ltd could double its return on equity if it cut $100 million in costs, including millions spent on corporate jets and housing for its chief executive.

Voce Capital Management LLC is asking Argo shareholders to install five new directors at the company’s annual meeting next month, saying the current board is responsible for a “culture of indulgence.”

Voce outlined its case in a securities filing, seen by Reuters, which is plans to file later on Tuesday.

Argo said it could not comment on any of the matters until it sees the filing.

Voce said that by eliminating $100 million in costs, including some $20 million that includes payments for corporate jets, sponsorship, CEO pay and housing, including a waterfront villa in Bermuda and a penthouse apartment in New York City, Argo’s return on equity could climb by 4.6 percent.

That would handily lift its 10-year average return on equity of 5.7 percent to double digits, Voce said.

The $250 million hedge fund, run by J. Daniel Plants, owns 5.6 percent of $2.4 billion Argo, which specializes in insurance and reinsurance products