Activist investment strategy thriving as investors seek enhanced returns in a difficult economic environment, say RWC’s Wildschut & Soininen
|February 26th, 2013||
|Investors are increasingly looking to specialist activist investing to improve performance. Hedge Fund Research recently reported $3.8bn flowing into activist funds in 2012, versus $1.8bn in 2010.|
Co-heads of the RWC European Focus Fund, Maarten Wildschut and Petteri Soininen, find that the current economic backdrop provides a very fertile ground for the team’s constructive activist strategy to create value in listed markets.
Commenting on the economic climate, Maarten Wildschut said: “As active owners, we invest in a small number of fundamentally sound European quoted companies, in which we can act as a catalyst for value creating change. The current economic environment has led many companies to be more open to re-assess their group structure and capital allocation. This provides a very good environment for shareholder involvement. Furthermore, the short-term orientation of financial markets can often lead to mis-pricing of the shares of companies that are undergoing change. With an in-depth understanding of companies and their transformational opportunities, active owners are in a good position to generate strong returns." Regarding active ownership, Petteri Soininen added: “Active ownership seeks to generate sustainable shareholder value by improving economic value creation within portfolio companies, reduce discounts through improving interaction with capital markets and improving corporate governance. Our strategy combines elements from value-based, private equity and event-driven investing. This is an attractive proposition to institutional investors looking for a long term approach to equity markets.”
The RWC European Focus Fund enjoyed strong performance in 2012, achieving performance of 30.0% compared to the benchmark of 18.8% for the FTSE World Series Europe Total Return.1 Since February 2009, when the current team took the helm, the Fund has returned 132.3% versus a 68.2% increase in the broader European market.
Dan Mannix, Principal of RWC, commented: “We believe that the current market environment is conducive to the strategy as the low level of stock liquidity in markets is providing an opportunity to acquire mis-valued stocks, at a time when company managements and boards are focussed on efficient capital allocation and are highly attuned to the needs of shareholders.
“We will be launching a Cayman fund for the European Focus strategy at the end of March 2013. The strategy currently has $280m of assets and is up +8.2% YTD*. We are in the process of book building and believe it is the right time to be raising additional capital for the Fund with opportunities in both European equities and Activist strategies particularly compelling.”
RWC is responsible for $5.5bn of assets and manages a range of active equity and bond strategies for institutional and intermediary clients.
For Detailed Investor Profiles on these Investors, click below:
Related People: Ajay Gambhir;
Related Entities: MPC Investors Ltd*;
Related Article Tags: Shareholder Activists, Corporate Raiders and Proxy Battles; Hedge Fund Launches and Hedge Fund Closings
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