Alternative investors see activism as value driver, says Novus survey
Institutional investors view activism as a successful tool used among hedge fund managers to increase returns and stimulate growth in their investments, according to a survey by Novus.
"With institutional investors under increasing pressure to add value and deliver returns, we're not surprised to see unconventional investment strategies like activism growing in popularity and a great uptick in allocators willing to employ them," says Basil Qunibi, CEO and founder of Novus, a portfolio intelligence and analytics company based in New York.
The survey found that the majority of experts (78 per cent) believe activism drives shareholder value.
Nearly all respondents (94 per cent) anticipate activism will grow in popularity and 70 per cent said they would be willing to personally invest in funds that employ this strategy.
Respondents widely agree (77 per cent) that hedge funds will be negatively impacted when their founders step back or retire in coming years.
Eighty-eight per cent of experts believe the industry will continue to institutionalise, a step which will likely help funds maintain long-term viability.
Nearly two-thirds (61 per cent) said post-financial crisis, pensions are under extreme pressure to generate greater returns as opposed to focusing on preserving existing capital.
"Today's institutional investors face an uphill battle when it comes to managing their liabilities, placing enormous pressure on both managers and allocators to increase alpha," says Qunibi. "At Novus, we believe that diving into existing portfolios to analyse them in an objective way and making sense of disparate data from various sources is the best way to unlock value and reveal hidden opportunities for any investor. In doing so, we've helped our clients gain significant additional alpha in comparison to their peers."