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Komfie Manalo, Opalesque Asia: The current wave of investor activism is being driven by hedge funds and other alternative investment managers, more notably by Pershing Square (led by William Ackman), Icahn Associates (led by Carl Icahn), Jana Partners (led by Barry Rosenstein), and Elliott Capital (led by Paul Singer) said Laura Starks, the Charles E. & Sara M. Seay Regents Chair in Finance and Associate Dean for Research at the University of Texas at Austin’s McCombs School of Business.
In an article published at the National Law Review, Starks said the spike in activism activities also resulted in some high-profile successes. She was quoted as saying, "At the heart of shareholder activism is a quest for value. A key feature of large corporations is separation of the management of the business from its ownership, which gives rise to what economists refer to as an 'agency problem.’ Activists step in and seek change when they feel that the board is not effectively monitoring the company’s management."
Queried on the academic analysis on activism, Starks noted a study by Lucian Bebchuk, Alon Brav, and Wei Jiang that showed neutral to positive performance for the five years following activism which could be interpreted as evidence against the claim that "myopic" activists push for short-term improvements that sacrifice value in the long run.
Activism spikes spinoffs...................... To view our full article Click here
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