Active investor
An active investor or activist investor ( English shareholder activism or activist investor ) is a natural or legal person who tries to influence the strategy of a company with the help of an investment in a mostly listed company. The aim is always to increase the value of the investment through share buybacks , higher dividends , M&A , spin-offs , a change of strategy or a change in management and board of directors .
Active investors are often of the opinion that the respective management of the company has developed self-interests that are diametrically opposed to those of the shareholders or investors, and that these are value-destroying. Deficiencies in corporate governance as well as excessive salaries or company jets and ostentatious offices are often complained of. These fights are often fought in the public media and on social networks.
features
requirements
Activist demands are always aimed at increasing the value of stocks.
- Return excess capital to shareholders via share buybacks or dividends
- Divesting parts of the company via sale or IPO
- Sale or merger of the entire company
- Change to the board of directors or management
- Change of strategy or change of company or profitability goals
Capital investment
The most common strategies are based on a minority stake, as this ties up little capital and minimizes risk. Often the participations or parts of them are via options u. a. held. Examples: In 2017, the Swiss hedge fund manager Rudolf Bohli ran a campaign with a stake of 0.2 percent in Bank Credit Suisse . Daniel Loeb tried with his hedge fund Third Point through a 1.3 percent stake in Nestlé to win management for his concerns.
Consultant
Banks often advise only the goals of activists and not the activists themselves, so as not to negatively influence future business relationships with the companies. According to the American provider of financial data Factset , the following banks and law firms were responsible in an advisory capacity in the USA in 2016:
| Consultant | Number of activists | Number of companies |
|---|---|---|
| Morgan Stanley | 0 | 18th |
| Goldman Sachs | 0 | 17th |
| Evercore Partners | 0 | 9 |
| JP Morgan Chase & Co. | 0 | 7th |
| Houlihan Lokey Howard & Zukin | 1 | 4th |
| Consultant | Number of activists | Number of companies |
|---|---|---|
| Goldman Sachs | 0 | 24 |
| JP Morgan Chase & Co. | 0 | 14th |
| Morgan Stanley | 0 | 13 |
| Credit Suisse | 5 | 9 |
| Houlihan Lokey Howard & Zukin | 0 | 5 |
| Consultant | Number of activists | Number of companies |
|---|---|---|
| Olshan Frome Wolosky LLP | 83 | 0 |
| Schulte Roth & Zabel | 20th | 0 |
| Vinson & Elkins LLP | 0 | 19th |
| Kleinberg, Kaplan, Wolff & Cohen | 14th | 0 |
| Cadwalader Wickersham & Taft | 7th | 6th |
| Morgan Lewis & Bockius LLP | 1 | 12 |
History and Development
Activist investors are as old as the public limited companies themselves. The very first public limited company, namely the Dutch East India Company ( Vereenigde Geoctroyeerde Oostindische Compagnie, VOC ), which was founded in Amsterdam in 1602, was the target of an activist campaign. The investor Isaac Le Maire became its largest shareholder and complained about problems in the area of corporate governance .
In 1932, Adolf Berle and Gardiner Means described in their book " The Modern Corporation and Private Property " that the owners of a company slowly lose control as it grows.
United States
In 1981, for example, there was not a single attempt by an active investor to influence a company in the United States. But as early as 1986, 10 percent of all company acquisitions were so-called hostile takeovers.
| 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 104 | 128 | 130 | 147 | 151 | 292 | 506 | 598 | 508 | 370 | 407 | 366 | 392 | 390 | 458 | 487 |
The number of activist campaigns can vary depending on the characteristics chosen.
Germany and Europe
Since the financial crisis, activist campaigns have also increased in Germany. The goal is usually to increase performance compared to the industry average by taking over and / or breaking up. The activists act increasingly aggressively and direct the attacks personally against senior managers. Often other shareholders with misinformation are also mobilized to support the campaigns ("angry shareholders"). Examples are the activities of the Swedish financial investor Cevian Capital at Bilfinger and Thyssenkrupp in 2016, those of the Active Ownership Capital (AOC) at Stada (also in 2016), which led to the takeover by other financial investors, and the attacks by the hedge fund founder Paul Singer on the management of Thyssenkrupp in 2018. At Grammer AG , an activist campaign even had a negative impact on customers who feared the company would be broken up. From the end of 2016 to November 2017 there were around 120 such campaigns in Europe, almost twice as many as five years earlier. In some cases, investors sell short their target company's stocks and use negative claims about the company to drive the stock price in the desired direction.
Selection of active investors
Netherlands
- Isaac Le Maire († 1624)
United States
- Allan Gray
- Ancora Advisors LLC
- Amber Capital
- Bill Ackman via Pershing Square Capital Management
- Carl Icahn via Icahn Enterprises LP
- Daniel Loeb via Third Point Management
- Engine Capital
- Harris Associates LP
- Jana Partners
- Nelson Peltz via Trian Fund Management
- Marcato Capital Management
- Paul Singer via Elliott Management
- Relational Investors
- Sandell Asset Management
- Starboard Value
Sweden
Switzerland
- Gregor Greber via Veraison SICAV
- Martin Ebner via Patinex u. a.
- Rainer Marc Frey via Horizon21 AG
- Rudolf Bohli via RBR Capital Advisors AG
media
Movies
- Wall street ( 1987 )
literature
- Jeff Gramm: Dear Chairman, Boardroom Battles and the Rise of Shareholder Activism . HarperCollins Publishers, New York, NY 2016, ISBN 0-06-236983-0 .
- Owen Walker: Barbarians in the Boardroom: Activist Investors and the battle for control of the world's most powerful companies . FT Publishing, 2016, ISBN 1-292-11398-7 .
- Scott Fearon, Jesse Powell: Dead Companies Walking: How A Hedge Fund Manager Finds Opportunity in Unexpected Places . St Martins Pr Inc, 2015, ISBN 1-137-27964-8 .
- Tobias E. Carlisle: Deep Value: Why Activist Investors and Other Contrarians Battle for Control of Losing Corporations . Wiley, 2014, ISBN 1-118-74796-8 .
- Nils Krause: Shareholder Activism: A Practitioner's Handbook . Walter de Gruyter, 2014, ISBN 3-11-175602-5 .
- Lisa M. Fairfax: Shareholder Democracy: A Primer on Shareholder Activism and Participation . Carolina Academic Press, 2011, ISBN 1-59460-919-5 .
- H.-Y. Chiu: The Foundations and Anatomy of Shareholder Activism . Bloomsbury Professional, 2010, ISBN 1-84113-658-1 .
- Jay W. Eisenhofer, Michael J. Barry: Shareholder Activism Handbook . Panel Publishers, 2005, ISBN 0-7355-5700-4 .
Individual evidence
- ↑ Corporate Raider: The financial sharks are starting to bite . In: Frankfurter Allgemeine Zeitung . June 17, 2002, ISSN 0174-4909 ( faz.net [accessed April 17, 2017]).
- ↑ Christiane Hanna Henkel: Driver of Shareholder Democracy: The Return of the "Raider" . In: Neue Zürcher Zeitung . November 18, 2013, ISSN 0376-6829 ( nzz.ch [accessed April 17, 2017]).
- ↑ Martin Lüscher: US hedge fund puts Nestlé under pressure. June 26, 2017. Retrieved December 18, 2017 .
- ↑ 2016 Shareholder Activism Review. (PDF) February 1, 2017, accessed December 18, 2017 (English).
- ^ Manfred Rösch: Die Aktiengesellschaft - a stroke of genius for the sea traders . In: Finance and Economy . January 3, 2014 ( fuw.ch [accessed December 18, 2017]).
- ^ Geoffrey Poitras: Equity capital: from ancient partnerships to modern exchange traded funds . First ed. New York 1954.
- ^ Frank Partnoy, Steven Davidoff Solomon: Frank and Steven's Excellent Corporate-Raiding Adventure . In: The Atlantic . May 2017 ( theatlantic.com [accessed April 17, 2017]).
- ↑ Chris Young, Rick Faery, John Bordes, Charu Sharma, Qin Tuminelli, Raj Patel, Austin Rutherford, Andy Hao Yan: Corporate Insights The activism agenda: What are activist investors looking for? CREDIT SUISSE SECURITIES (USA) LLC, New York 2016, p. 5 .
- ↑ Dirk-Oliver Löffler: How do activist investors endanger companies? In faz.net, November 17, 2017.
- ↑ Here are the 10 biggest activist money managers and some of their most impressive bets . In: Business Insider . August 16, 2016 ( businessinsider.com [accessed April 17, 2017]).
- ↑ Top Activist Investors List | Carried interest . In: Carried Interest . 2014 ( carriedin.com [accessed April 17, 2017]).
- ↑ Bosses beware: Activist raiders are targeting UK plc . In: Telegraph.co.uk . August 17, 2015 ( telegraph.co.uk [accessed April 17, 2017]).
- ↑ Constantin SeibtReporter research @ ConstSeibt: Christoph Blocher - the professional . In: Tages-Anzeiger, Tages-Anzeiger . December 26, 2011, ISSN 1422-9994 ( tagesanzeiger.ch [accessed April 17, 2017]).
- ↑ Oliver Stone: Wall Street. December 11, 1987. Retrieved April 17, 2017 .