Tuesday, May 26, 2015

Warren Buffett: Activist Investor?

The CFA institute put up an article on Warren Buffett and is activist ways when he was running his Limited Partnership.

Read the full article here: http://cfainstitute.tumblr.com/post/119596271528/warren-buffett-activist-investor

Donald Ingham writes:
But in Buffett’s early days, he actually engaged in numerous activist investments, including his takeover of Berkshire Hathaway. Much like today’s most notorious activist investors (Carl C. Icahn, Bill Ackman), Buffett made a name for himself by identifying market inefficiencies that could be exploited for the benefit of his investors and public shareholders. But unlike the corporate raiders of the 1980s, Buffett wasn’t out to tear companies down. In fact, he wanted to help build them up.

Tuesday, May 12, 2015

Academic Research Uses Hedge Fund Solutions Data to Find Activist Funds Outperform

Top Hedge Funds and Shareholder Activism


Using a large dataset of hand-collected information [captured from Hedge Fund Solutions' research on activist investments] on recent hedge fund activist interventions through mid-2014, we find that both the number of hedge fund activists and their interventions have increased recently, and that, contrary to suggestions in the literature, the average announcement period abnormal stock returns continue to be positive. We also find that the returns to hedge fund activism vary in surprising ways. Strikingly, the frequency of interventions is not significantly associated with higher returns, but returns are significantly higher for hedge fund activists that make larger investments. These results hold even after controlling for selection bias. Based on these findings, we develop a hedge fund reputation measure for the “top hedge funds” derived from the size of a fund’s investments in the recent past. This reputation measure is superior to the alternative ones we examine. Top hedge funds differ from other hedge funds in important ways: they tend to have significantly higher assets under management, they are invested in more portfolio companies, they have a longer track record, and they have a history of holding board seats in target firms. The market appears to anticipate the superior performance of these top hedge funds even before announcement of intervention. Moreover, post-intervention target-firm operating performance associated with these top hedge funds is significantly superior to that of other hedge fund activists.

To download and read the rest of their research using our data click here.

To subscribe to Hedge Fund Solutions' FREE weekly activist research click here.

For additional information about HFS activist research products contact Troy Marchand.

Monday, May 11, 2015

Interview With Damien Park, Activist Thought Leader

Damien Park, Activist Thought Leader, Gives The Blueprint For an Effective Activist Campaign

The Bulldog Investor did an interview with Damien Park of Hedge Fund Solutions. Park is a thought leader in the activist space. He is frequently retained by CEOs and Boards for his expertise. He is also regularly featured in leading news publications, now including the Micro Cap Investing Podcast. In this interview, Park lists the ingredients for a great activist campaign.

 Podcast: Download

Thursday, May 7, 2015

Land & Buildings Publishes "Restore MGM" Video


This video can be found at https://vimeo.com/126913415

Background to the activism:

3/17 Land and Buildings (L&B) proposed MGM convert to a REIT to unlock value and nominated four to the board; L&B issued a presentation indicating a 70% upside in stock value

3/30 L&B filed preliminary proxy materials nominating four people to the board 

4/1 L&B sent a letter to MGM calling on the board to form a committee and engage an independent financial advisor to evaluate options to create long term valu

4/20 L&B sent a letter to shareholders highlighting the reasosn to vote for its four board candidates

4/27 L&B joined Pontiac General Employees Retirement System in calling for MGM to eliminate its Dead Hand Proxy Put provision in the company's debt agreemen

4/29 MGM issued a shareholder presentation titled, "Improved Stewardship for Improved Returns" 
On the same day Paulson & Co (a 1.42% shareholder) announced its support for MGM's nominees, saying the company should continue its strategy to build another resort in Macau and invest in non-gaming attractions in Nevada.

Monday, May 4, 2015

Carl Icahn Explains Activist Investing

Catch Carl Icahn's interview on the latest Wall Street Week, as he explains Activist Investing.