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22.03.2018 11:58 Age: 117 days
Category: News

Emerging Shadow Funds, Bringing Shareholder Activism to the Masses?


As previously covered by BETTER FINANCE, shareholder activism is experiencing a new spring. As opposed to the aggressive nature of their forefathers, today`s activists put faith in cooperation and dialogue rather than conflict and public battles. While activist investors have traditionally been larger Wall Street heavyweights, it seems that this new emerging era of activism proposes a role for individual investors as well. Several challenges remain for individual investors however, bearing in mind the sheer number of companies often targeted and the necessary resources to initiate and ensure lasting change. 

New avenues are emerging for individual investors to “ride the coat tails of big-name activists”- more specifically through “shadow” funds. As explained in a recent article by the Financial Times, these “shadow” funds systematically review where the world`s biggest activists are investing, and subsequently acquire stock of target companies for their own portfolios. One such fund is Norwegian Skagen Insight, with the stated aim of providing best possible risk-adjusted returns by shadowing some of the world`s most attractive activist campaigns. While Skagen is tiny in a global context, with assets of $30 million, other larger players are following suit. US based 13D Activist Fund is one, with assets of $375 million, accessible to retail investors who can buy directly or through brokerage. In addition to the sizeable difference between the two funds, minimum investment requirements are $32 and $2500 respectively. 

Despite decreasing barriers to participation by retail investors, patience is still key. Urging such patience is Mr. Tomas Johansson, portfolio manager at Skagen, highlighting the multiyear nature of activist processes in his interview with the Financial Times. To read full article, please see here. 


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