Financial News Online US- Five years ago, most finance directors would have shuddered at the thought of engaging with their hedge fund shareholders. But alongside the establisheddoyens of traditional fund management in the UK, finance directors said their most constructive relationships are often with shareholders from the hedge fund world.
They come better prepared for one-on-one meetings, find their depth of understanding of the businesses they invest in superior and they ask more probing questions of management.
This is despite the small group of activist hedge fund investors, which have instigated often uncomfortable changes at companies including Dutch bank ABN Amro and Dutch engineering group Stork.
Although no finance director Financial News spoke to would comment on the record, several said fund managers and analysts from hedge funds had a tendency to get into the balance sheet more quickly, trying to identify anomalies, which once corrected might lead a stock to outperform. They said many traditional long-only fund managers often asked more top level questions about issues such as marketing and remuneration, information they said was already in the public domain.
