Hedge Funds: The Protean Survivalists

This paper investigates activist investing as adopted by some institutional investors and hedge funds, and explores the resulting impact on the decision-making and corporate governance processes of the companies in which they invest. Firstly, it suggests that although activist investing has become something of a fad and its benefit to firm performance is still disputed, investors attitudes have changed and acceptance of the strategy is growing. Secondly, it posits that hedge funds, in keeping with their respective financial size and available resources will continue to apply this strategy with three key objectives in mind, namely: (i) To unlock value for short-term profit gains, (ii) To support a quasi-long-only medium-term (circa. 7 years) investment diversification strategy, (iii) To acquire businesses for the building of conglomerate industrial groups of companies, i.e. forging King Cong funds. For a more thorough introduction to hedge funds in general, readers are invited to read my earlier study titled:The Challenge of reigning-in Hedge Funds through Regulation and the Need to improve Disclosure Requirements"". ""