This article was originally published by Canadian Business.
When Wes Hall arrived on Bay Street nearly three decades ago, he was struck by how management placed a low priority on retail investors. “If you’re not happy, sell your stock,” was a typical response to their concerns, he recalls. They could afford to be dismissive; slate- and plurality-based board elections meant that shareholders had to vote on the nominated directors as a group. Withheld votes counted for naught.
Today, stock owners hold more sway, in part thanks to the growing influence of activist investors. These individuals and funds build up large positions in target companies, then use them to push for changes to boost the stock price. Even as withdrawals and poor returns dog the hedge fund industry, the activist subset is bucking the trend: Hedge Fund Research’s HFRX Activist Index posted an annualized return of 6.1% over the three years to May 2016, against -0.7% for the Global Hedge Fund Index.
Jamaican-born Hall got his foot in the door of corporate Canada as a law firm mail clerk before serving as a law clerk at media company Canwest Global. His introduction to the work he does now came during a stint with proxy solicitation and consulting firm Georgeson Canada. He founded Kingsdale Shareholder Services in 2003 and was so successful that his former employer—the Canadian arm of Australian financial administration group Computershare—pulled out of the proxy solicitation space here, leaving Kingsdale with what it says is a 90% market share. Acting on behalf of management, hostile bidders or fund managers, Kingsdale plots strategy and crafts arguments to win shareholder support in battles for control of public companies.
Read the full article at Canadian Business.