Survey of Top Activist Investors 2015: Part 2
Following the first part of the FTI Consulting and Activist Insight 2015 Shareholder Activism Survey which looked at the reasons behind the sharp increase in activist activity in the last five years, Part II of the Survey asked 24 activists firms to look ahead to what the landscape will look like in 2016. This part of the report evaluates the themes and opportunities expected in the year to come, as well as the change in the ways in which activists are engaging with target companies.
According to the investors surveyed, there will be continued opportunities to target companies in 2016. The most significant opportunities are not thought to be in the mega-cap stocks so often heard about in the news, in which only 16 percent of investors see substantial opportunities to launch an activist attack. Rather, 42 percent of survey respondents see opportunities among micro-cap stocks and 58 percent see opportunities for gains among small-cap stocks.
When it comes to the sectors in which activists expect to engage and the types of activism they expect to be prevalent, respondents noted the sectors they perceived as the most undervalued and therefore ripe for activist attention. Investors identified significant opportunity in the energy and industrial sectors, though they were more mixed on their views about opportunity in the healthcare sector. Alongside an expected increase in M&A, activists expect to engage in more merger activism, such as merger “bumpatrage.” Sixty-three percent of respondents also see an increase in operational activism in 2016.
Investors surveyed also indicated that their average holding period for a stock has doubled since 2013 and that they typically spend about six months evaluating a company prior to making a decision about whether or not to engage.
Review the full findings of the survey by clicking on the Read Report button below.
Senior Managing Director