Should we cheer the shareholder activists?

“Shareholder activism is on the rise,” says Raj Hindocha of Deutsche Bank. After a decade of stock market underperformance and a series of corporate governance scandals, shareholders are becoming more assertive in pushing for improvements at the firms they own.

Activist hedge funds – those that take stakes in companies with the specific intention of lobbying for changes – are at the forefront of this trend, with assets under management rising at a compound annual growth rate of 24% since 2008.

Increasingly, the involvement of these funds is welcomed by other investors, reflecting the fact that they’ve managed to [...]

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