Current Developments In Shareholder Activism Across Europe by Activist Insights
The Growth of Activist Investing
UK Companies Targeted
Is It A Good Time to Be a Stock Picker? Interview With Worm Capital
ValueWalk's Raul Panganiban interviews Eric Markowitz, Director of Research, and Dan Crowley, Director of Portfolio Management, at Worm Capital. In today’s episode they discuss their approach at Worm Capital and where they find opportunities. Q4 2020 hedge fund letters, conferences and more Interview with Worm Capital's Eric Markowitz and Dan Crowley
Market capitalization of European companies publicly targeted by activists, 2010-2015
Where Are the Activists From?
European companies targeted by US-based activists per year
Activism in the United States
Activism in Europe
Where Next for the Activists?
Institutional Investors and Activism
Cause and Effect
UK companies with new activist investments in 2015
Activist investors need the support of other shareholders and typically invest where there is existing shareholder discontent.
53% had less than 90% support for one or more resolutions at previous AGM.
37.5% Capital increase (w, w/o pre-emptive rights)
25.0% EGM 2 weeks notice
12.5% Director elections
Based on aggregate voting results from the previous AGM of 17 UK/Irish Companies who received new activist investments in 2015
Dissident Support by European Investors
Voting by European investors who have voted at least 10 global proxy contests
European Proxy Contests
Dissident Support at EU Proxy Contests
A long-term investor of the company proposed the election to the board of three directors. This shareholder cited various concerns with management performance and cost control. The company failed to provide compelling arguments to dispel these concerns or explain why shareholders should not support the election of these nominees. Against management recommendation, Newton supported two of the three candidates in the belief that the company and board would benefit from their insight, challenge and expertise.
A vote FOR the election of these nominees is considered warranted on account of: The shareholder proponent has made a compelling case that change should be considered, and the company has inadequately explained why the status quo is preferable. The company’s relative underperformance against comparable peers on TSR and share price discount to net asset value and the overall higher fixed cost base of managing these assets over a longer period of time demonstrates a case to discuss strategic alternatives. The nominees are considered independent, free from any commercial arrangements with Elliott and have relevant experience which would be beneficial for the company. If elected the nominees will only comprise a minority element on the board and as such there is little concern that Elliott’s interests will dominate the board’s discussions.
BMO (F&C) (FOR)
We believe the three nominees are independent and will bring valuable skills, experience and fresh perspectives to the board. The board will benefit from their participation in formulating a strategy to deliver sustainable investment performance in the future UBS (FOR)
In light of the candidate’s experience and of the company’s past performance, this proposal merits support.
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