Friday, December 06, 2013

Activist investor panel: Does activism enhance company value for investors? LAPFF 2013

David Trenchard from "activist managers" Knight Vinke (on left of photo) target large companies which they believe have hidden value.

They aim to challenge the status quo and unaccountable management. They do not believe in the USA model of activism which is seen as being aggressively litigious.

Alex Pauisco from DBAY advisers (no link on Internet? on right of picture) currently concentrate on small companies. While investors traditional sell shares in companies they think are not run properly they buy more in order to change. Jurisdiction is key. In Asia activist managers will lose money. In the US it is tough since you have little rights. Europe is good because shareholders have rights.

Bryan Schneider was last speaker (2nd left) from Entrust capital who invest in hedge funds. They use research to invest in the best of class. They manage billions of dollars and their aim is to unlock value by investing on track records and references.

In Q&A I said that I could understand that by exploiting market inefficiencies they can make money but surely pension funds are about long term investments over 20 years not "4 to 5". How do they respond to the accusations that they are creating short term value by destroying it in the long term.

The Chair, David Pitt-Watson said this used to be called "asset stripping".  Alex said they follow the advice of legendary USA investor Warren Buffett that they only buy if want to own all the shares in that company and want to hold them forever.
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