Activism and private equity

Escrito el 13 Junio 2007 por Juan Toro en Financial Markets

There might be a blur difference between hedge fund activism and private equity activity, but there is definitely a difference. Private equity activity can be summarized as follows: a private equity firm sees value on a firm, it acquires the firm, gets involved in management and will wait till their decisions and strategies mature.

Hedge fund activism, on the other hand, just tries to get a percentage of a company, enough to have strong voice and communicate with other institutional investors. Jointly with other shareholders the hedge fund tries to implement a turn in the management and decisions of the firm. When the market believes that the turn has been fulfilled and the equity soars, the hedge fund leaves the firm with a capital gain. A recent episode of this strategy is the battle sparked by the Children


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