Poll: What Is the Primary Cause of the Upturn in Shareholder Activism?
In a poll conducted earlier this week in the CFA Institute Financial NewsBrief, we asked readers what was causing the recent increase in shareholder activisim.
About 43% of 574 global respondents to this week’s poll dismiss reports of an upturn in shareholder activism as exaggerated and think any perceived increase is primarily attributable to the savvier use of media by activist investors. Indeed, such hedge fund managers as Bill Ackman and Carl Icahn seem to be regular guests on CNBC of late. And Icahn has embraced social media, recently taking to Twitter to publicize his investments in Dell and Apple. Activists are also targeting bigger companies: As reported by Forbes, there have been 14 activist campaigns against companies with market values of $1 billion or greater in the first half of 2013 versus only four such campaigns a decade ago.
Nearly 29% of respondents believe the upturn in activism is mostly indicative of investors’ reaching for additional returns through restructuring and financial engineering, whereas 19% think newfound support from traditionally quiet institutional investors, including pension funds and mutual fund managers, has strengthened the hand of activists and is the primary reason behind the increase. With companies flush with cash and interest rates near record lows, it’s not surprising that activists and pension funds are joining forces.
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