How do Activist HF's screen for investments?
It seems that activist investments requires an extreme amount of time, effort and due diligence around one company. However, how do they even know where to begin? They can't run a deep dive into every single stock in a given sector until they find the operational and financial due diligence that fits their thesis. How do they quickly and efficiently narrow down the thousands of potential targets to say a handful where they can really start to take the time to get granular without sacrificing efficiency? Are there certain broad criteria's that can be found rather quickly via a quick overview which would signal that an activist campaign could be utilized, and a deeper analysis should be run? I apologize if this is a dumb question, I am new to the space however am very interested and passionate about activism! Any advice or insight would be appreciated!
Dont think either employs leverage
yes you are right, I found that Ackman (I know he's pivoting away from Activism) was quoted saying he never has and never will use margin. Thanks for the insight!
To answer your original question, yes, both strategies can absolutely employ leverage. The exact amount and method can vary a bit and it's usually a bit more subtle-- some will run unlevered, some just for liquidity purposes; in terms of explicit leverage, activist and distressed are generally on the lower side. FYI Bill Ackman doesn't use margin because he can and does lever up in the public markets (Pershing has outstanding bonds). Activists can use options and distressed funds use CDS or total return swaps to essentially lever up.
Minima tenetur repudiandae porro eaque perferendis nihil. Magni tempore similique cupiditate velit quis.
Quis minima temporibus quia doloribus expedita aliquam ducimus. Aut quia ut nemo voluptatem quibusdam consequatur. Mollitia tempora non temporibus optio totam asperiores laboriosam. Maiores debitis consectetur quae laboriosam aut sed. Recusandae sapiente praesentium quisquam cumque vero fugit suscipit suscipit.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...