NEW ORLEANS – The age of the activist hedge fund is here, and companies would do well to accept it.
Such were the sentiments of mergers and acquisition lawyers and some investment bankers from top Wall Street institutions who spoke before a packed Ritz-Carlton conference room here on Thursday.
Corporate boards besieged by activist hedge funds are better off inviting them in rather than fending them off, Morgan Stanley’s (MS.N: Quotazione, Profilo) vice chairman of investment banking said on Thursday.
“They are going to win no matter what you do,” Morgan Stanley’s Robert Kindler said, speaking at a Tulane Corporate Law Institute event here.
Activist hedge funds buy up shares of a public company and push for changes in management and business direction. They are criticized for being too focused on the short term and credited with shaking up tired management teams. Among the older names in the business are Carl Icahn and Nelson Peltz, with some newer names being William Ackman of Pershing Square and Robert Chapman of Chapman Capital.
