The inevitable backlash is taking place.
Onésimo Alvarez-Moro
See article:
Could 2006 prove to be the year that exposes the limits of hedge-fund activism as a strategy for gingering up company performance? The proposition sounds almost heretical. After all, last year saw corporate America coming under siege as scores of high-profile companies in virtually every industry faced pressure from shareholder groups to shake up their operations: Time Warner, General Motors, McDonald's, Blockbuster, Morgan Stanley and Circuit City, to name just a few.
Perhaps the watershed event in corporate Europe last year, meanwhile, was the stunningly effective campaign by hedge funds to halt Deutsche Börse's planned takeover of the London Stock Exchange. That stoked a debate in Germany about both scrutiny of hedge funds and whether "Deutschland AG" needed an overhaul to revive the nation's economy and markets.
Yet it is possible that activism reached its zenith in 2005 - in effectiveness if not in incidence - even as the hedge-fund industry's assets swelled to $1,200bn globally from under $200bn in 2001, giving such groups massive clout.
See full Article (paid subscription required).
Posts
