Tue, Mar 19, 2024
A A A
Welcome Guest
Free Trial RSS pod
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: Beware of activist investors?

Friday, June 10, 2016

By IMD Professor Nuno Fernandes

Activist investors are relatively new – but very influential – players in international capital markets.

Activist investors are shareholders at publicly traded companies who attempt to affect change in an organization either by directly appealing to, or putting heavy pressure on, the company’s board of directors, bypassing the normal advisory process.

The scope of activist investors’ actions varies depending on their assertiveness and on what exactly they seek to change at a given company.

The firms that activists target tend to underperform relative to their industry. Due to activists’ aggressive attitude toward management and hostile approaches to short-term profit making, they are often perceived as "corporate raiders," "green mailers" or "asset strippers".

Types of activism

Hedge fund activism is among the most aggressive and involves shareholders who usually seek a significant change in a company’s strategy, financial structure, management or board composition.

More common, but less conflictual, investor activism consists of shareholders playing a part in deciding how much executives are paid. This is referred to as "say on pay" and originated from concerns about top executives deciding on their own remuneration and overpaying themselves. In the US, "say on pay" was a provision of strong post-financial crisis legislation referred to as Dodd-Frank, which h......................

To view our full article Click here

Previous Opalesque Exclusives                                  
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. KKR raises $6.4bn for the largest pan-Asia infrastructure fund[more]

    Laxman Pai, Opalesque Asia: The New York-based global investment firm KKR has raised a record $6.4bn for its second Asia-focused infrastructure fund, underlining investors' continued appetite for private markets. According to a media release from the alternative assets manager, the figure top

  2. Bucking the trend, top hedge fund makes plans for a second SPAC[more]

    From Institutional Investor: SPACs aren't dead. At least not to the folks at Cormorant Asset Management. The life sciences firm, whose hedge fund topped its peers in 2023, is confident it will match the success of its first blank-check company. Last week, the life sciences and biopharma speciali

  3. Benefit Street Partners closes fifth fund on $4.7 billion[more]

    Bailey McCann, Opalesque New York: Benefit Street Partners has closed its fifth flagship direct lending vehicle, BSP Debt Fund V, with $4.7 billion of investable capital across the strategy. Benefit Street invests primarily in privately originated, floating rate, senior secured loans. The fun

  4. 4 hedge fund themes that are working in 2024[more]

    From The Street: A poor earnings report from Tesla (TSLA) has not hurt the indexes on Thursday. The decline in Tesla stock, which is losing its position in the Magnificent Seven pantheon, is more than offset by strong earnings from IBM (IBM) and ServiceNow (NOW) . In addition, the much higher-t

  5. Opalesque Exclusive: A global macro fund eyes opportunities in bonds[more]

    Bailey McCann, Opalesque New York for New Managers: Munich-based ThirdYear Capital rebounded in 2023, following a tough year for global macro. The firm's flagship ART Global Macro strategy finished the year up 1