A Guide To Avoid Becoming An Accidental Activist Investor

Anderson Kill White Paper

PUBLISHED ON: May 3, 2013

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Shareholder activism is on the upswing. As the New York Times recently reported, this year's contested directors' elections are much bigger than last year's and include six at companies with a market value of more than $1 billion. Moreover, activists have been winning a majority of board elections - 66% so far this year, according to the data provider FactSet SharkRepellent ("As Shareholder Fights Heat Up, Activists Aim at Bigger Targets," New York Times Dealbook, April 16, 2013).

Most shareholder campaigns are undertaken by hedge funds known for their activism, such as Icahn Management LP, Santa Monica Partners Opportunity Fund LP, and Relational Investors, LLC. But it sometimes happens that a normally passive investor will find its interests aligned with an activist and support the activist’s efforts to varying degrees.