We in the editorial team at Activist Insight are proud of the work we’ve produced this year and so – in a modest week for new campaigns – I wanted to recap some of our highlights from 2018.
Through its 11 issues, Activist Insight Monthly covered an enormous amount of ground, including the overlap between activism and ESG, the return of activism to Canada, and M&A activism – perhaps the hottest part of a hot year for campaigns. We substantially redesigned our Activist Investing Annual Review for its fifth edition, bringing a more topical flavor. The sixth, which will follow a similar format, is what we’ll be busy working on through the remainder of the year and January.
Michael Mauboussin: Here’s what active managers can do
More in-depth research was on show in our three special reports: expanded coverage of Europe, a new one on activist short selling, and our third survey of activists. Next year we hope to bring you updates on some of the regions and topics we have covered previously and perhaps a few new angles.
Over on Activist Insight Vulnerability, we’ve doubled the number of vulnerability reports we write on companies each week. We’ll be looking at our track record in a bit more detail in next month’s Annual Review.
You may also have noticed Elana Dure's podcast, launched in September 2018. Much as I’ve enjoyed being a (mandatory) guest, props go to Dan Zacchei, Jay Frankl, Samir Manji, and all of our intermediary award winners for their participation in making this a success.
More recently, we’ve launched a newsletter exclusively for subscribers to Activist Insight Online. The weekly wrap is compiled by Iuri Struta and highlights the best of our reporting each week. If you think you should be receiving this and aren’t, please email [email protected]
My colleagues have written a number of very interesting in-depth stories for Activist Insight Online and Activist Insight Shorts this year, focusing on founder-led campaigns, executive ousters following short campaigns, the decline in financial sector activism, State Street’s engagement with British Land, and M&A activism. We’ll be bringing you many more in 2019.
On a personal note, there’s also been this newsletter, which I have had the pleasure of writing and the only mildly uncomfortable experience of combing back through the archive to test my predictive powers. Favorites include the “Don’t look back in anger” column on second-time-around fights, the wildest campaigns of the year, and the reaction to Larry Fink's "new model of shareholder engagement." It's been an honor and a privilege, one I look forward to resuming next year.
And of course, it almost goes without saying that we reporters stand on sturdy shoulders here at Activist Insight: from the data and design teams who bring both the style and the substance to our mere words; the accounts team, whose claims of "funding secured" are, in fact, well-founded; marketing, who get the word out; and tech, that keep this show on the road. We salute you!
Josh, Iuri, Elana & Eleanor
One interesting subtext for 2018 was the amount of movement in the advisory space. A number of banks established dedicated practices starting in September last year, with Citigroup, Jeffries, Stifel and Deutsche Bank among those establishing fresh practices and another reorganization midyear at Goldman Sachs. In the legal world, Eric Schiele moved from Cravath, Swaine & Moore to Kirkland & Ellis in January and Kai Liekefett joined Sidley Austin in February, leading the practice to the second-highest number of defense assignments in our intermediary awards this month. More recently, public relations firms have been busy hiring governance experts to bulk up their advisory functions – Joele Frank, ICR, and Sard Verbinnen affiliate Strategic Governance Advisors have all beefed up. Activist Insight Monthly has been following the moves and has added adviser spotlights to its campaign in focus articles to capture the “inside baseball” angle. Whether or not there’s a corner of the market that’s ripe for disruption in 2019, we’ll be watching all the same.
Quote of the week comes from an impeccably polite but firm “demand” letter from David Nierenberg’s D3 Family Funds to Houston Wire & Cable (HWCC), which gives the company (shock, horror) a choice of strategies to pursue:
“[W]e believe that HWCC is a well-managed and well-governed company which earns ‘no respect’ from being public, in part because of micro-cap market neglect and because of ‘a failure to communicate.’ We believe HWCC either should pursue a long-term rapid growth strategy which could appeal to the public market or pursue slower organic growth while taking advantage of stock market neglect to repurchase shares, in size, for an extended time and then sell itself to a strategic buyer… We do not want this company to straddle the middle ground because that probably would lead to mediocrity and share price stagnation.”