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Proactive Investors Mean Peak Performance


In the business world, investors are typically the people in management positions need to please. Thus, they are typically away from the day to day campaign and operations. Still, in 2018 according to Activist Insight, a research group, things might be changing. Their data say that last year 956 companies had investors approach them.

This is a step up from the 822 companies in 2017. These investors all had ideas for management and overall management. Some even requested for positions on the board. These activist investors were already on the move in 2017 contacting 240 companies. In 2018 they contacted more at 266. These are usually shareholders who are trying to protect their current investments by asking for improvements from companies that are underperforming.

Activists on the Move

Based on Activist Insights numbers Primary focus activist was not as active as other groups contacting about 116 companies. These are the type that has substantial hedge funds. Also, whose reputations were made through a change in companies like Yahoo! And Allergan. On this, Activist Insight analyst Josh Black had this to say:

“More entrants into the activism space does limit the options for the big-name activists.”

On the other hand, Brand-name activists are still making no waves. One key example is Elliott Management. It is one of the more prominent firms to adopt activist strategies which made 2018 a hectic year for them. That year they launched 24 new campaigns. Meanwhile, another primary focus activist Starboard won 29 seats in 2018 via negotiated settlements.

To help with their annual Review Activist Insight teamed up with Schulte Roth & Zabel, a law firm. This team-up helped confirm how Primary Focus Activists like Third Point, as well as, Pershing Square Capital Management, were eyeing the likes of Campbell Soup, and Newell Brands.

According to Schulte Roth Partner, these firm who started very busy in 2019 aren’t going anywhere anytime soon. It also looks like money will be raised despite poor returns.

“Fundraising is certainly more challenging especially when firms are not performing. But I don’t think these types of firms will have problems.” Said Klein.

Still, there is no assurance whether this approach will get the companies to improve. It takes more than just proactive investors to turn the company around or to take them to the next level.