Tue, Jun 18, 2019
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Other Voices: Private equity and activism

Thursday, April 11, 2019

By Amadeus Moeser, Sidley Austin LLP

The relationship between private equity funds and activist hedge funds has always been double-edged. While in the past, engagements of activists often led to the sale of a target company or less profitable operations of a company to private equity funds, many go-private transactions have been opposed by activists trying to improve the terms of the deal and companies brought private equity funds in as "white knights" during a hostile takeover.

However, tensions seem to be slowly disappearing as the transitions between activist hedge funds and private equity funds become blurred. Private equity funds are beginning to adopt activist tactics and activists are increasingly engaging in private equity transactions.

Private equity firm Waterton Global Resource Management started to use activist strategies in 2018 and pushed for a new slate of directors at Hudbay Minerals after accusing the board of mismanagement. Other private equity firms like KKR, Golden Gate Capital and Sycamore Partners had already applied activists tactics, for instance, by acquiring so called "toehold" stakes in public companies (typically under the 5% public reporting threshold) as a way to approach management and begin a dialogue regarding a buyout. On the other hand, activists started to take private equity opportunities themselves by buying entire companies, alone or with a partner. In 2016, Icahn Enterprises bought auto service and part chain Pep Boys f......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Study shows alignment between seeders and hedge fund managers is improving[more]

    B. G., Opalesque Geneva for New Managers: US law firm Seward & Kissel has just published its Seed Transaction

  2. Trends: Hedge funds increasingly ditching 2 and 20[more]

    Chronic lackluster performance is gradually pushing hedge funds away from the traditional "2 and 20" fee structure to other methods. This trend is emerging as hedge fund fees get squeezed across the board. Average management fees declined to a record low of 1.43% in the first quarter of 2018. N

  3. News Briefs: Selling a stake in a PE management company is fine, say LPs, depending on the GP's motivation, Investment companies need to reimagine for whom and how they create sustainable value, Does your portfolio need a quant fund?, Meet the power players at the SoftBank Vision Fund, 'Talking his own book': Hedge fund manager pans Eisman's short call[more]

    Selling a stake in a PE management company is fine, say LPs, depending on the GP's motivation Opalesque Industry Update - Two thirds of investors will support a GP decision to sell a stake in its management company if it is to facilitate generational change at the business or to strengt

  4. Investing: Hedge funds are very bullish on Lyft, Hedge fund manager Stanley Druckenmiller sells almost all stocks, Short-seller pain that began Monday just switched to a bloodbath, Josh Friedman, the hedge fund titan, is spending $1bn to short the commercial real estate market[more]

    Hedge funds are very bullish on Lyft From Yahoo: Billionaire hedge fund managers such as David Abrams, Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates.

  5. PE/VC: Private equity raking over US-China trade war debris for bargains, Your next check could be cut from one of these atypical VC firms[more]

    Private equity raking over US-China trade war debris for bargains From Finance Asia: Disruption caused by the fractious relationship between the world's two biggest economies spells opportunity for the nimblest investors. Funds are looking to potentially bridge gaps in broken supply chain