EUROPE - Fidelity Investments has accused some activist shareholders of buying small holdings in companies merely to make short-term gains on the stock market.
Speaking at the Fund Forum International conference in Monaco earlier today, Anthony Bolton, investment director at Fidelity, told delegates while many firms were using their shareholder engagement powers to make beneficial changes to companies, some investors taking only a minimal holding are doing so only to create conflict and shift listed equity prices.
"Engagement is worthwhile and to be a responsible shareholder you need to take an interest in a company and vote," said Bolton.
"Where we are having problems with activism is where activists have taken small stakes and companies are reacting and I am concerned [companies] are making small [reactionary] moves at the expense of the long term.
"Any investor can say what they think. I'm not against shareholders saying what [a company] should do something different from what they currently do. But sometimes they are trying to create a band wagon effect and manipulate the market," he added.
His comments follow concerns elsewhere in Europe suggesting while some shareholders see engagement with companies as an opportunity to do good, some are perhaps abusing their positions to make quick investment gains.
The Netherlands government proposed changes to shareholder disclosure earlier this month which, if implemented, will require investors reveal their motives for buying listed shares where they hold more than 3% of a company.