We've all heard this question with increasing frequently. It's a logical and reasonable one, too, as assets pour into new and existing activist funds.
Activist managers, big and small, new and old, have attracted significant new money in the past few months. Just this week ValueAct announced it would raise $1.5 billion, its first trip to investors in several years. All told, activist funds manage over $100 billion in assets, up significantly in the past couple of years.
Does the explosion in assets signify the next bubble in equity markets? Or have we just seen the start of a new era?
Above all, anything is possible. Without a doubt, soaring activist AUM since 2009 followed the soaring equity market. If (or perhaps when) equity markets pull back, they will likely pull activist investments with them. At least a few of the current activist funds that have enjoyed rising valuations and fund inflows would confront declining valuations and redemptions.
Yet, we think (surprise!) activist investing has staying power. Too many investors have seen meaningful, sustainable returns, and committed way too much, to retreat. We show why in a current blog post.
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