Don’t forget – sign up for our free daily newsletter to stay in the activist investing know. Activist Investing has historically been very American. But we seem to have a growing base of activists in other non-traditional areas.
The success of campaigns and rise in assets under management of activist funds has led to a declining number of potential targets within the U.S.
With that, there’s been a necessary increase in activity in Europe. There were 22 activist campaigns in 1Q 2015, compared to 39 in all of 2014.
A decade ago, no one talked about tail risk hedge funds, which were a minuscule niche of the market. However, today many large investors, including pension funds and other institutions, have mandates that require the inclusion of tail risk protection. In a recent interview with ValueWalk, Kris Sidial of tail risk fund Ambrus Group, a Read More
Now, it’s not that Europe doesn’t have its own activists. European Funds like Cevian Capital, The Children’s Investment Fund and Knight Vinke Asset Management are managing multiple billion dollar funds.
The big key for Europe is that a lot of activism is done behind closed doors and out of the public eye. There’s a lack of media attention on such gentlemanly activism, versus the media starved American fund that comes complete with poison pen letters and management bashing. Over half of European activist campaigns never enter the public domain.
But now the typical American activist, facing too much competition in American markets, is hungry to bring what’s done in the dark, into the light.
Paul Singer’s Elliot Management has already opened a European office in London. Elliott is already taking on the 126-year-old UK company, Alliance Trust.
Bill Ackman’s Pershing Square said at Oxford’s Said Business School, “Activist campaigns against European companies is going to happen.”
New York-based P. Schoenfeld Asset Management, which forced French media conglomerate Vivendi SA to pay a special dividend earlier this year. The UK’s Cevian Capital even got a Fortune profile — with its founder Christer Gardell being called the Carl Icahn of Europe.
Part of what’s driving the current resurgence of activism in Europe is the record levels of cash on the books there. Coupled with the low cost of debt and renewed spotlight on corporate governance is really driving the market.
Still — it’s worth remembering that the European market is considerably more complex than the US due to the convoluted mess that is the European Union. It’ll be interesting to watch American activists adapt to the quiet European ways, or alternatively, try to force American-style activism on European companies.
If Dan Loeb and Third Point’s entrance into the Japanese market has taught us anything, it’s that they are capable of change. Along those lines, we’re increasing our focus across the pond to find less crowded and more unique activist opportunities. Looking to come along for the journey, feel free to check out activist strategy here or the newly launched activist ideas.