Activist investor Mick McGuire closed his hedge fund, Marcato Capital, after losses. File photo of McGuire checking into the Buffalo Wild Wings annual meeting in June 2017, when he won seats on the Golden Valley company's board of directors. (The Minnesota Star Tribune)

The activist investor who battled Buffalo Wild Wings three years ago has closed his investment firm after losing nearly all of its assets.

Richard "Mick" McGuire began notifying investors late last week that he was closing the hedge fund, Marcato Capital Management of San Francisco, Reuters and CNBC reported.

Earlier this year, the Wall Street Journal reported that Marcato's asset base had shrunk to $250 million from $3.2 billion in 2015 due to poor investment performance and redemption requests from investors. By the end of September, Marcato held investments of $128 million, according to a regulatory filing.

A spokesman for Marcato couldn't be reached Tuesday.

McGuire was a partner in William Ackman's Pershing Square Capital Management before starting Marcato in 2010. Like Ackman, he gathered investors' money to buy sizable stakes in companies and force them to make strategic or management changes that lifted market value. He would then sell its stake at a profit.

In the summer of 2016, he began building a position in Buffalo Wild Wings, the Golden Valley-based restaurant chain that grew quickly during the late 1990s and 2000s. McGuire began to publicize a plan he said would triple the value of Buffalo Wild Wings shares, which were trading around $150 at the time.

McGuire wanted Buffalo Wild Wings to sell most of its company-owned restaurants to franchisees. Its mix of franchisee- and company-owned units would shift from 50-50 to 90-10. Buffalo Wild Wings would end up chiefly with real estate holdings that could be sold to enrich its shareholders, McGuire reasoned.

Chief Executive Sally Smith, who had built the firm from a few dozen restaurants to more than 1,200, took some steps to implement McGuire's ideas. But he didn't feel she moved fast enough and launched a proxy fight for seats on the company's board in 2017.

From February until the firm's annual meeting in early June, the two sides tried to win over shareholders in statements and presentations that became increasingly bitter. At nearly the same time, however, another firm approached Buffalo Wild Wings to explore a prospective takeover.

McGuire won the proxy fight by an undisclosed margin at the shareholder meeting in early June, and Smith announced she would step down at the end of 2017, ending 21 years at the top of the company.

At McGuire's first board meeting a few weeks later, Smith disclosed the behind-the-scenes due diligence that had begun with the other firm, Arby's Restaurant Group, a unit of Inspire Brands. That firm and several other restaurant chains are owned by Atlanta-based Roark Capital.

The companies in November 2017 reached terms on a deal in which Arby's paid $157 a share for Buffalo Wild Wings. And McGuire went along, settling for a small profit on Marcato's 7% stake in Buffalo Wild Wings rather than trying to drive the broader transformation he touted to shareholders during the proxy battle.

Buffalo Wild Wings remains owned by Arby's, which somewhat reduced the size of the office in Golden Valley.

McGuire began Marcato with the backing of Blackstone Group, the world's biggest hedge fund investor, and Ackman. Its returns tumbled late last year, leaving it with a sizable loss for 2018, an investor in Marcato told Reuters. It will also likely end 2019 in the red, Reuters said, citing the investor, which it didn't name.

Evan Ramstad • 612-673-4241

Activist investor Mick McGuire, who urged franchise changes, checked into the Buffalo Wild Wings annual meeting in 2017. (The Minnesota Star Tribune)