The Edge Special Situations Study: King of the Activists
Value creation comes in many forms in the Special Situations space, and often companies need a friendly (or not-so-friendly) push in what is perceived as the “right direction” to achieve shareholder returns by activist investors. We have taken ten of the major US activist firms (listed below) and examined their respective campaigns taken over the last 15 years to determine if their actions have resulted in shareholder value creation. We are looking to answer the question, “Who is King of the Activists in terms of total shareholder returns?” We will also examine each activist’s overall performances in terms of market caps and sectors against the relevant comparable indices over time.
Methodology: For each of the activist investment firms examined, we cross-referenced positions disclosed in 13D (for entry positions above 5% outstanding) and 13F (for entry positions below 5% outstanding) filings against Bloomberg’s Activist Campaign function to determine the list of confirmed campaigns. Each ticker was also individually verified to guarantee that the data feed provided the correct prices during each time period examined. Of the 331 total tickers in the master list of activist campaigns, eight names were excluded from the final list due to unconfirmed data.
Here are the 10 firms tracked by the study and their average stock performance, according to The Edge:
Note: Performances in this study do not reflect actual fund performance. Our study reflects the absolute returns based on entry of positions on the same date as the activists and does not account for reweighting of positions over time.