Activists’ Use Of Investment Banks – Activist Insight

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Activists’ Use Of Investment Banks by Activist Insight

As activism has grown, defending corporates has been a pretty tasty gig, with investment banks Morgan Stanley and Evercore and law firm Paul Weiss recruiting new talent to lead their practices in the last 18 months. This week, UBS got in on the act, luring Darren Novak away from boutique investment bank Houlihan Lokey, which predominantly represents activists, to work for its defense team.

Investment Banks

Houlihan Lokey’s activism practice, which once advised on campaigns for Barington Capital Group, Marcato Capital Management and P. Schoenfeld Asset Management, looks to be in the doldrums. Its leader, Gregg Feinstein, passed away in February and Geoff Sorbello – a former Okapi Partners and Institutional Shareholder Services staffer – left for a gig at Elliott Management over the summer. Despite this unfortunate run on the bank’s talent, Houlihan’s Gary Finger confirmed to me yesterday that the bank will still “do activism” and will look outside to staff its team (undervalued lawyers and proxy solicitors apply now).

The wider picture, however, is that a much-predicted increase in activists retaining investment banks for their campaigns doesn’t seem to have materialized. Houlihan’s main competitors, Blackstone and Moelis & Co., have undergone major reorganizations in which activism appears to have fallen by the wayside. In particular, Moelis led a no-holds barred response to Pershing Square Capital Management’s Herbalife campaign that may have signalled a more conservative stance for the future.


A banker I spoke to recently admitted that cost and ego may each have played a role in limiting activists’ use of investment banks, which are still seen as optional and often dial-back the activist’s more optimistic assessments. Yet the banker also defended their offering, saying they helped vet activist ideas, prepare pitches to shareholders and proxy advisers and paint a more informed picture of M&A opportunities. Houlihan at least will continue holding the torch – if the demand is there, it should clean up.


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