The Morning Brief: Sharkrepellent on the State of Proxy Fights
Are activists losing their punch? Yes and no. A new study published by FactSet’s sharkrepellent.net found that companies are (mostly) having a good year when it comes to facing off unwelcome foes in proxy fights. As of June 5, companies won 62 percent of proxy fights over board seats that went to a vote this year. This is a big increase from 39 percent in 2014. In addition, activist candidates have on average received 33 percent of the votes outstanding in proxy contests that went to a shareholder vote versus an average of 42 percent in 2014. However, this is just part of the story. Keep in mind that many fights result in settlements before the annual meeting. Sharkrepellent.net says 33 proxy fights have been formally settled (or withdrawn after the company made material concessions) this year as of June 5. This is more than any other year at this point since FactSet began tracking proxy fights in 2001. “More importantly, many companies are choosing to grant activists board seats, often as part of a standstill agreement, before letting an activist situation escalate into a proxy fight,” noted the report. The website counted 46 non-proxy fight activist campaigns resulting in a board seat as of June 1, again the most at this point in the year. This compares with 34 in 2014 and just 11 in 2013. The report also cites a number of examples of 2015 non-proxy fight campaigns that resulted in board seats: Elliott Management at EMC and The Interpublic Group of Companies, Starboard Value at Staples, Pershing Square Capital Management at Zoetis, Icahn Associates at The Manitowoc Co. and Trian Fund Management at PepsiCo.
Daniel Loeb’s Third Point and Steven Tananbaum’s GoldenTree Asset Management are among investors in the Series B $5 million funding of Harvest Exchange, an investment management marketplace platform. The funding was led by Highland Capital Management. ___
Here’s yet another database weighing in with its calculations of hedge fund performance. According to BarclayHedge, the average fund was up 0.92 percent in May and 4.58 percent for the first five months of the year. BarclayHedge notes that two of Barclay’s 18 hedge fund indices were up in May, led by the Healthcare & Biotechnology Index, up 5.38 percent, Pacific Rim Equities, up 2.22 percent and European Equities, up 1.85 percent. The Equity Short Bias Index was down 2.14 percent in May and 6.35 percent for the year, the only hedge fund strategy in the red this year.