Activist Investor

(redirected from Activist Investors)

Activist Investor

A minority shareholder who seeks to influence decision making at a company by voicing concerns, engaging in a dialogue with management, or lobbying other shareholders for support. The demands could relate to changes in management, representation on the board, acquisitions or divestitures, salaries, bonus payments, use of retained earnings etc.

Activist Investor

A shareholder or group of shareholders in a publicly-traded company that tries to make changes in management and/or operations in a way that suits the shareholder(s)' interests. Activist investors deliberately acquire substantial stakes in certain companies and therefore wield enough influence that the company often must listen to them. Activist investors may choose to negotiate directly with the company or indirectly though methods like proxy wars or public shaming. Activist investors may be motivated by ethical concerns; they may want the company to pay its workers better, for example. More often, they wish to change the company in a way that will maximize their own return. Activist investors may be investment companies, institutional investors, shareholder groups, or even wealthy individual shareholders.

Activist investor.

An activist investor attempts to force a corporation to make changes in management, board structure, investment policies, use of retained earnings, or other practices, often by introducing shareholder proposals or putting forward alternative directors.

Activist investors may be hedge funds, institutional investors, such as money managers or pension funds, wealthy individual investors, or groups of investors with a common cause.

Some activists deliberately accumulate substantial stakes in undervalued companies to force changes that will increase the share price so they can sell at a profit. Others, such as long-time or majority stakeholders, may object to current management practices, prefer an independent board of directors, or want a voice in executive pay. While they seek improvement to the bottom line, they may also be committed to strengthening the company in other ways.

Activist methods vary as well. Some wage public relations and proxy wars while others seek to implement their proposals through negotiation. In recent years activists have achieved a number of goals including increased respect for their power to effect change.

Mentioned in ?
References in periodicals archive ?
The activist investors claim Genesco - whose brands include Johnston & Murphy, Lids, Schuh and Journeys - underperform its peer group and that "good-faith efforts to work constructively with the company to find a better solution for shareholders have not been taken seriously.
Activist investors are simply demanding accountability, said Elson, University of Delaware director of the Weinberg Center for Corporate Governance.
But today's activist investors want something different--something that may actually benefit companies.
Activist investors are fund managers with deep pockets who perceive value so buy into a business and shake things up.
UBS Group AG (NYSE: UBS) has said that it has hired Darren Novak, a managing director at Houlihan Lokey Inc, to advise companies on how to defend themselves against activist investors.
The growing criticism of activist investors has followed a steady rise in activist campaigns at companies large and small.
Activist investors on average hold big positions in individual companies for a much shorter time than the tenure of senior management at those firms.
Ms Garrett-Cox - who has been in a public clash with the firm's activist investors Elliott Advisors - will leave her position as chief executive of Alliance Trust Investments (ATI) on March 11.
A wolf pack is composed of a group of activist investors working in unison to gain control of corporate boards.
However, activist investors aren't happy about the threat of a huge tax penalty associated with the spinoff, and want Yahoo to sell its core business instead.
Activist investors aim to make money by buying shares of companies and then pushing them to change their strategies.
Similarly, the funds available to activist investors have grown 153% over the same period to $120bn worth of assets under management.