Eric Rosenfeld: How institutional investors have come to recognize the value of activist investing

Описание: Chapters:

00:00 - Intro

00:47 - Crescendo’s activist approach to obtain board representation. A key metric for Crescendo is enterprise value to free cash flow.

03:17 - Idea generation process from various sources.

04:33 - Idea investigation for undervalued companies.

06:20 - Exit strategy out of an investment and off of boards.

06:45 - What recurring themes cause value to be held down. Limitations or inefficiencies in management, operations, or specific divisions.

14:25 - Why Canadian regulatory rules can facilitate shareholder activism.

16:06 - The “Poison Pill” in Canada is more efficient.

17:01 - Proxy fight parallels to a political campaign. Institutions much more willing to support an activist. Why reputation holds intrinsic value for activist investors.

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Eric Rosenfeld is the founder of activist investing firm Crescendo Partners, a New York-based firm formed in 1998. In this Opalesque.TV video interview Eric discusses what characterizes his strategy, where he tries to close the value gap of undervalued companies by obtaining board representation and then addressing from within a company's limitations or inefficiencies in management, operations, or specific divisions.

Since foundation, Crescendo has successfully gotten representation on 20 boards and has been effective in increasing value for shareholders, a factor that has made it easier for the firm to join boards and gain stockholder support. Among other factors, Rosenfeld says a key metric in viewing potential stock value is the enterprise value to free cash flow, and he describes the firm's idea generation process, which come from various sources, including the 200 other directors they have worked with, analysts who are aware of unhappy shareholders, other unhappy shareholders who are often fellow value investors, and even former or current employees.

According to Rosenfeld, there has been a transition of the activist investor image from the "corporate raiders" of the 1980's, to productive and constructive sources of company restructuring which can unlock value. This transition has been noticed by institutional investors who are much more willing to both invest in and work with activist investors.

In this Opalesque.TV BACKSTAGE interview, Rosenfeld also talks about:

Exit strategy out of an investment and off of boards
What recurring themes cause value to be held down
An example of Crescendo's many successes: Spar Aerospace
Why Canadian regulatory rules can facilitate shareholder activism
How a proxy fight parallels to a political campaign
Why institutions are much more willing to support an activist now.

Eric S. Rosenfeld formed Crescendo Partners in 1998 after managing the merger arbitrage business at Oppenheimer and Company for 14 years. Mr. Rosenfeld is a regular guest lecturer at Columbia Business School and has served on numerous panels at Queen's University Business Law School Symposia, McGill Law School, the World Presidents' Organization and the Value Investing Congress. He is a faculty member at the Director's College and has also been a regular guest host on CNBC. Mr. Rosenfeld received an A.B. in economics from Brown University and an M.B.A. from the Harvard Business School.