EUROPE - Europe should expect a "tsunami wave" of activist investment in the coming decade, according to Florian Homm, CIO of the hedge fund group Absolute Capital Management (ACM).
Defending activist investment managers and hedge funds, Homm told the Super Hedge conference in Frankfurt that activist hedge funds, of which there are some 160 in the US compared with a handful in Europe, were usually long-term investors.
He compared ACM and other activist hedge funds with pension fund managers like Hermes, which manages the assets of the BT pension schemes in the UK and which takes an active stance in corporate governance.
"An activist hedge fund is an investor who sees himself as an owner and who takes his fiduciary responsibility seriously. Mostly the dialogue is constructive," Homm said.
The CIO said he saw activist investment strategies as a way of helping corporates follow sound business strategies, thereby creating wealth for the whole economy.
"We do not destroy companies, it is companies that sell themselves," he insisted. "The biggest risk [for corporates] is a lack of ideas and too much money."
He added that "adventurous mismanagement" had destroyed the value of many German companies, and also pointed to what he described as Schering's "dilettante" research and development platform.
"Other shareholders benefit as well. To my knowledge we have never done anything to the disadvantage of minority shareholders," Homm continued.
ACM had some $2.4bn (€1.8bn) in assets under management at the end of January this year.