Disgruntled stockholders are becoming more assertive in demanding changes at companies they think aren’t performing up to their standards, according to a recent Wall Street Journal report.
Hedge funds and foreign institutions, which have upped their interest in Asia over the past two years at a breakneck pace are searching these smaller, less liquid markets for opportunities to make profitable gains.
But despite upturns in stock returns in some areas, notably Japan and South Korea, many investors have shown their disapproval of companies by turning into activists.
Often hedge funds and, more frequently of late, pension and mutual funds around the world are leaping into the fray of what some call “proxy-fights” in which shareholders must vote on changes pushed by activist investors against the wishes of managing executives and are pressuring investors into taking sides on issues, the Wall Street Journal report says.
The costs of these skirmishes could bring serious ramifications for investors as many of the proposals deal with issues in the day-to-day running of the company.