31/10/2014
Activist investors increasingly present on both sides of Atlantic
p { margin-bottom: 0.1in; line-height: 120%; } Activist shareholding is doing well. According to a study by the law firm Schulte Roth & Zabel, activist shareholders have often succeeded in bringing about changes at US businesses in recent years. A survey carried out in partnership with the data provider Mergermarket, covering head of companies and activist hedge funds, has found that activism can be expected to incrase in the next 12 onths. More than half of respondents estimate that the increase will be “substantial.” Recent data suggest that companies engaged by dissident shareholders are successful increasingly often, with a rate of success that has more than doubled in the past 10 years to more than 70%. It is therefore not astonishing that activists are showing a desire to continue on this path, particularly since certain major institutional investors are now more inclined to participate in campaigns organised by dissident shareholders. Nearly half of respondents to the survey say that their efforts will be likely to result in improvements in efficiency or in relation to operational issues next year, with the performance of equities, modifications to the board of directors ro mangaement teams, or announced acquisitions in the firing line. The study, two thirds of which is dedicated to the US situation, points out that activism is also on the rise in Europe. Two thirds of participants are expecting activity to rebound in Europe in the next 12 months. One of the reasons advanced for this is that the European market offers a reduced number of potential targets for campaigns as a result of the muted economic environment in the region.
