Activist investing has been one of the most talked about topics on Wall Street in recent years. While the debate can be polarizing–especially as fodder for the mainstream financial media–what tends to get overlooked is the actual value that an activist shareholder can bring to truly dysfunctional or misguided companies.
Equities.com had the opportunity to speak with noted Wall Street financier Paul Kessler, Principal and Founder of Bristol Capital Advisors to get the facts straight on activist investors and what the majority of them actually do. While the largest names have certainly attracted an enormous amount of attention, it may not accurately represent this segment of the capital markets. According to Kessler, the majority of activist opportunities live in the sub-$500 million market cap space where companies are undercovered by institutional research and entrepreneurial management teams tend to lack the resources and experience to execute on the next stages of growth.
Here are a few stats that Kessler shared:
- Today Activist Hedge Funds manage in excess of $120B dollars.
- 66% of these Activist Hedge Funds are located in the United States.
- There are over 165 Activist Funds globally.
- Average Holding period for Activist Hedge Funds ‘2 years’. However many Activist Funds have far longer holding periods.
- Compound Return of Activist Hedge Funds 2012-2014 +50%.
- Average increase in share price of Target Company over the same 2 year period following Activist Sale 25%.
|This video interview may include forward-looking statements that involve risks and uncertainties. Forward- looking statements are statements that are not historical facts and are subject to risks and uncertainties, which could cause actual results to differ from the forward-looking statements. To read our full disclosure, please go to: http://www.equities.com/disclaimer.|
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