Hedge Fund Manager Calls Have Less Pull

A recent Bloomberg article takes a look at the influence on share prices caused by the comments of hedge fund “stars” at the industry’s three biggest annual events: Robin Hood, the Sohn Investment Conference in New York and the SkyBridge Alternatives Conference (SALT). “While the managers’ pronouncements consistently moved shares of the companies they targeted,” the article says, “their influence has been on the decline.” It outlines findings as illustrated by movement of stock price (intraday shifts between high and low prices on the corresponding conference day) compared to that of the entire year. The analysis also measured which managers […]

Activist Dan Loeb is Sweet on Nestle

In a letter released to investors last month, Dan Loeb’s hedge fund Third Point announced that it owns approximately 40 million shares in Switzerland-based Nestle SA, according to a recentBloomberg article, referring to the $3.5 billion stake as “the biggest bet of his two-decade career as an activist investor.” According to the article, the move is the latest in a recent push by Loeb into Europe due to “an improved economic outlook and declining political risks in the region.” His stake in Nestle, it says, “ratchets up pressure on the European consumer goods industry”—citing the failed effort earlier this year […]

The Short Side of Activist Investing

A recent Bloomberg Gadfly piece observes that “investors who make bearish bets on stocks and then lay out their case publicly” have delivered a “performance as a whole [that] is not all that great in the short term – or in recent years either, at least as far as market-beating returns are concerned.” Along with a number of specific anecdotes, the article highlights data from Activist Shorts Research that shows a declining impact to the public announcements of activist bearish short investors and funds. “So far this year, stocks that have been targeted by shorts have fallen an average of […]

Ackman’s Argues the Ill Effect of Index Funds on the Market

Barron’s reports on Pershing Square Capital manager Bill Ackman’s latest letter to shareholders, in which he sharply criticizes index funds. Ackman suggests that index funds are making the U.S like Japan, where the “system of cross-corporate ownership, the keiretsu, has been blamed for decades of Japanese corporate underperformance and market malaise.” He writes that “at current rates of inflows, it will not be long before index funds effectively control Corporate America and the corporations of many foreign countries,” which would create outcomes similar to Japan “without the counterbalancing force of large active investors and improvements in the governance oversight implemented […]