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By Beverly Chandler, Opalesque London:

Law firm Latham & Watkins reveals in a new report Hedge Fund Activism in Technology and Life Science Companies that activist hedge funds are increasingly targeting technology and life science companies.

The report’s lead author Nick O’Keefe found that historically there has been a view that research and development companies (such as technology and life science companies) are not typically targeted by hedge fund activists. He believes that this was in part due to factors such as the complexity of their businesses and their dependence on founding shareholders. However, his review of campaigns of 33 hedge funds from 2005 through the end of 2011 indicates that they are not only targeted, but disproportionately so, relative to companies in other industries.

The firm believes that there are many attributes of technology and life science companies that may make them attractive targets, such as the available pool of potential acquirors, the volatility of their industries, and their tendency to accumulate cash.

"Most technology and life science companies have a market cap of less than $20bn, which is the upper limit of companies in our review group that were targeted. Small companies are the most vulnerable. Approximately 80% of the campaigns reviewed involved targets of less than a billion dollars in market cap. While newly public companies typical......................

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