What is an activist investor? The terms activist investor are often used interchangeably, but they are distinct terms in the investment world. The definition of an activist investor varies from firm to firm. An activist investor is a private investor that buys a minority stake of a company’s stock, typically purchasing a large number of shares.

Why would someone want to invest in this way? One reason for initiating or participating in activist investor strategies is to take advantage of a company’s Board of Directors. A Board of Directors with a demonstrated history of company mismanagement can lead to greater company control by a minority shareholder. agency for initiating or participating in hedge fund activism is to take advantage of a company’s financial structure. Under common law, companies must issue regular reports detailing their financial health and assets. These reports are public information, but under recent rulings companies are permitted to withhold certain material information from the public, including management’s positions and assets.

Activists tend to be more vocal than institutional investors. They tend to be outspoken opponents of specific industries or companies. One of the key differences between investors that take part in activist campaigns and those who do not is that institutional investors typically offer assistance to those corporations that are publicly traded. Hedge fund investors tend to work alone. Hedge fund activists are known for publicly blogging about the companies they are investing in, as well as participating in blogs and forums to discuss their investment strategies.

How are hedge funds different from traditional institutional investors? Hedge funds are not supervised by the Securities and Exchange Commission like traditional stockbrokers. Activist investors cannot file a complaint against publicly traded companies. One of the most noticeable characteristics of hedge fund activism is the focus on short term gains at the expense of long term losses. This is especially true in the case of oil and gas stocks. There have been several instances where hedge fund activists have called for the ouster of CEO’s based on the company’s stock price fluctuations.

How are hedge fund activists different than institutional shareholders? agency are known for their aggressiveness. If a corporation is deemed to be guilty of ignoring its own environmental policies or its ethical business practices, the activists may goad the company to change its ways or even going under. For this reason, it is important to understand the difference between what is an activist investor strategy and what is best for a company.

Activists are known to target publicly traded corporations that are perceived to be in violation of the shareholder’s rights or a breach of fiduciary duties. For example, environmentalists may target a corporation that is polluting the air and water. If such a corporation’s leadership did not take action against the pollution, the investors could move against the corporation and take a strong stance against the CEO. An alternative to this would be to create a formal process for shareholders to act as a voting pool and elect the CEO based solely on their personal preferences. This way, the activist shareholder would effectively eliminate any possibility of having a CEO that might ignore the wishes of the investors. agency of strategy is not commonly used but has proven effective at eliminating companies that violate shareholder’s rights.

Activism can take many forms. Some forms of activism focus on making changes on a local, regional, or national level. Activists in Japan have made a name for themselves by pushing for major changes in their companies like a 50% reduction in cigarette production. In the United States, some groups have made a political platform of impeaching President Bush due to his handling of the energy crisis. While agency differ from country to country, there is a significant difference between what is an activist and what is a teju.

With regard to corporate governance, it is clear that there is a great difference between activists and teju. The former seek to maximize shareholder value while the latter are looking out for the overall benefit of the company and its shareholders. Activists use various tactics in their attempts to make changes to the governance structure while teju-style investors make moves with a view to improve overall profit. However, irrespective of whether you choose to go with the beliefs of an activist or a term investor, the important thing is that both have a goal: maximize shareholder wealth.