Call it the Carl Icahn-effect but hedge fund bosses who pressure company managers to do what they say are back in fashion with pension funds and well-heeled investors, new stats out today show.
So-called activist hedge fund bosses – the type of investors currently stalking British supermarket Morrisons and train company FirstGroup – attracted more than $5bn of fresh capital from investors last year, according to Hedge Fund Research (HFR).
Rounded up together with similar types of funds – so-called special situation and credit arbitrage funds – they became the most popular type of hedge fund with investors for the first time since 2007.
HFR’s annual data release – launched today at an event in the Royal Exchange – showed these so-called ‘event driven’ funds attracted nearly $29.5bn from investors in 2013, making them the second largest type of hedge fund sector in the industry.
It’s rare the company CEO who likes being told what to do by a boisterous shareholder. But with the popularity of these funds soaring, maybe they should be more open to listening.
“It’s like the same situation as an under performing employee – the under performing employee might not like their boss,” HFR president Kenneth Heinz said today. “Management should be responsive to being approached because managers are normally reaching out privately at first.”
The boards of Morrisons and FirstGroup will no doubt be all ears from now on.