FTI Consulting and Activist Insight Reveal Outlook for Shareholder Activism
November 16 2015 - 7:30AM
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.
Research Methodology
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.
FTI Consulting, Inc.
1101 K Street NW
Washington, DC 20005
+1.202.312.9100
Investor Contact:
Abaigeal Healy
+1.617.747.1727
abaigeal.healy@fticonsulting.com
Media Contact:
Nicole Madison
nicole.madison@fticonsulting.com
+1.212.850.5647
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