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From Kirsten Bischoff, Opalesque New York:
It seems the point has been reached when the feeling of helplessness against market forces has shifted to a feeling of anger, sparking a new wave of investor activism. However, this trend (seen this past weekend with CalPERS/Bank of America, US Government/Auto Industry) does not indicate investors are specifically looking for opportunities in which to invest as activists, but reacting to the poor performance of companies they have already invested in.
The question then for activist hedge funds is, do investors have the interest, the patience and the stamina required to allocate to a strategy with a much longer view than has been required before?
The strategy overall has not fared as well as others during this crisis, and fell more than 30% in 2008 (according to Hedge Fund Research). Investing in under-performing companies during downward markets is not the easiest strategy to sell to investors.
And activist funds have been trending towards longer holding periods as compared to a few years ago. “A lot of these activists now have been holding their positions for one, two, three plus years,” says Steve Balet, Senior Managing Director at New York-based proxy solicitation and investor response consultancy Okapi Partners LLC.
Pharmaceutical M&A likely activist target, but managers also looking at longer term restructures
These longer holding periods ...................... To view our full article Click here
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