Additional Results From 2015 Shareholder Activism Survey See Increased Activity in Energy Sector and Among Small- and Mid-Cap Stocks
WASHINGTON, Nov. 16, 2015 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (NYSE:FCN), the global business advisory firm dedicated to helping organizations protect and enhance their enterprise value, and Activist Insight, a global information source on activist investment, today released additional findings from the 2015 Shareholder Activism Survey. According to Part II of the survey, activists see the greatest opportunity in small- and mid-cap stocks and expect to see an uptick in activity in the energy sector. The second part of the survey of 24 activist firms also revealed that activists’ average holding period is longer than in past years and that they expect to engage in multiple activist campaigns in the next 12 months, suggesting an active pipeline for the coming year.
Despite what recent headlines might suggest, more than half of the activists polled believe that the best activist targets are micro- to mid-cap stocks. Additionally, 44 percent of the activists polled singled out energy as the most undervalued sector, giving it the greatest potential for gains, following a low level of activist activity in 2015.
“Although campaigns at the largest companies dominate the attention of the media, sub-$2 billion companies make up the majority of the proxy fights and all activist campaigns,” noted Josh Black, Editor at Activist Insight.
Activists are also finding it easier to reach settlements with management teams. More than 90 percent of activists surveyed indicated they found it less difficult to reach settlements with activist investors compared to previous years.
Steven Balet, Managing Director and activism specialist in the Strategic Communications segment at FTI Consulting, said, “Shareholder activists have won an overwhelming majority of the proxy contests that resulted in a vote in the last two years, giving them confidence in their dealings with boards. Activists are also seeing increased support from large institutions, and with activists holding stocks for longer periods of time, boards are less concerned that activist attention is purely event driven, all of which helps to generate a more favorable response.”
Perhaps most surprisingly, the 2015 survey saw a 100 percent increase in the period for which an activist holds a stock compared with the 2013 activism survey. On average, today’s activist holds a stock for approximately three years. These activist campaigns require a considerable time commitment. In addition to the longer duration for which an activist typically holds a stock, activists spend around six months completing research and due diligence before deciding to act. Coupled with the data from Part I of the survey, which indicated that activists plan to continue raising capital and putting it to work, Part II of the survey reinforces the contention that the current spate of activist campaigns is not likely to slow.
The full survey findings from FTI Consulting, along with infographics and other insights on shareholder engagement and activism can be accessed here: http://www.fticonsulting.com/insights/reports/survey-top-activist-investors-2015-2.
The Strategic Communications segment at FTI Consulting executed the primary research, surveying 24 activist firms between June and July 2015. The survey sample consisted of economic activist funds that have been engaged in more than 1,200 activist events in more than 10 countries, including some of the largest and most high-profile situations in the last year.
About Activist Insight
Since 2012, Activist Insight has provided its diverse range of clients with the most comprehensive information on activist investing worldwide. Regularly quoted in the financial press, Activist Insight is the trusted source for data in this ever-evolving space. Activist Insight offers two great products: Activist Insight Online and Activism Monthly Premium magazine, and counts many of the world's leading investment banks, law firms, shareholder communications firms and institutional investors as its clients.
About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations protect and enhance enterprise value in an increasingly complex legal, regulatory and economic environment. With more than 4,400 employees located in 26 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges in areas such as investigations, litigation, mergers and acquisitions, regulatory issues, reputation management, strategic communications and restructuring. The Company generated $1.76 billion in revenues during fiscal year 2014. For more information, visit www.fticonsulting.com and connect with us on Twitter (@FTIConsulting), Facebook and LinkedIn.
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