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Carl Icahn Benedicte Gravrand, Opalesque Geneva:
It seems activism is no longer merely practiced by small hedge funds on small companies. Activist hedge funds are getting bigger, bolder, and are inspiring other investors to take on a more pro-active stance with the companies they have a stake in. And when a company becomes involved with an activist, this means, in two thirds of cases, a higher share price, and usually, better corporate governance.
According to an excellent article in this week’s Economist, activist hedge funds are becoming more pushy, as they have more cash at their disposal and are more comfortable taking on bigger companies; the article cites Sony (taken on by Daniel Loeb from Third Point), Apple (David Einhorn from Greenlight), UBS, PepsiCo, Netflix, Dell, Yahoo, J.C.Penney and Microsoft.
Breaking up heavy corporations is coming back into fashion, the article says, as assets being divested can fetch top dollar. Energy companies with easy-to-flog divisions are in favour, and so are cash-rich tech groups and ailing financial companies.
The Economist says this appetite for larger companies reflects investors’ appetite. Hedge funds now have around $73.4bn to position, compared to $11.8bn in 2003, according to Hedge Fund Research (H...................... To view our full article Click here
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