Activist investing: forget hedge funds, leave it to private investors

Demands from “activist investor” hedge funds are every bit as short-termist as the management teams they are trying to shake up, says Matthew Lynn. Private investors will take a long view.

Shell AGM
Shell is being pressed to split its renewables unit from fossil fuels
(Image credit: © SEM VAN DER WAL/ANP/AFP via Getty Images)

Hardly a week seems to go by without a fresh activist assault on a major British company. Last week, it was the turn of the energy giant SSE. Elliott Management, one of the most aggressive activist investors, attacked the company for not spinning off its renewables business, preferring instead to keep itself intact and beefing up its plans for switching out of fossil fuels.

Elliott, of course, is best known in the UK market for its long-running campaign against the pharmaceuticals giant GSK, which has had to scramble to defend chief executive Emma Walmsley in response to the pressure. Meanwhile, Shell is under attack from the hedge fund manager Daniel Loeb, who is campaigning for it to split out its renewables unit from fossil fuels. And Barclays has managed to see off the campaign for change led by the activist Edward Bramson for now, but either he or someone else may be back soon, pressuring either the bank or another major company. The list goes on and on.

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Matthew Lynn

Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years. 

He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.