Panel
The Activist Investor
Milken InstituteMichelle Edkins, Ed Garden, Clifton Robbins, Barry Rosenstein, Peter Weinberg, Anne Sheehan, Cliff Robbins, Michael D., Steve Miller
- Turnaround strategies and capital redeployment from retailers to brands and marketing are expected to drive material profitability, though short-term volume declines may cause tumult and lower earnings during the transition.
- Institutional investors including BlackRock, Vanguard, and State Street are predicted to engage more actively in strategic dialogue and support campaigns focused on long-term shareholder value and industry expertise.
- Governance reforms are anticipated to accelerate globally, specifically regarding the separation of chairman and CEO roles, the adoption of majority voting, and a shift toward boards with independent expertise rather than insider affiliations.
- Shareholder power is expected to increase through the removal of poison pills (declining from 60-70% of S&P 500 companies a decade ago to 8% currently), the rise of proxy access battles, and enhanced director accountability via straightforward removal mechanisms.
- Activist activity is forecasted to grow in emerging markets and regions outside the U.S. and UK as these areas catch up to Western trends, while boards become more responsive to both collaborative and aggressive investors.
- Capital flows to activist managers are projected to continue provided alpha generation strategies remain viable, despite downward pressure on fees for specialist funds impacting the economics of resource-intensive activism.
- Long-only investors are expected to evolve their engagement by supporting activist shareholders, challenging private market norms in public contexts, and utilizing the board to gain objective assessments from independent advisors.
- Regulatory and legal environments, particularly in the U.S., are noted as having a litigious nature that supports defensive approaches, while increased shareholder collaboration is deemed necessary to reduce redundant work and unlock full potential.