U.S. Chamber Forms
Coalition to Fend Off Activist Hedge Funds
2, 2015 — 3:17 PM EDT
Corporations are turning to the nation’s biggest business lobby to
help fend off activist investors such as Dan Loeb and Bill Ackman.
Chamber of Commerce is forming a coalition to make sure “long-term
value creation” drives public companies’ decisions, according to a
letter it sent Thursday to Securities and Exchange Commission Chair
Mary Jo White. The group plans to weigh in on regulations that affect
corporate governance, the letter said.
members have experienced an exponential rise in the frequency of
special-interest activism of all types,” said the letter, which was
signed by trade groups including those for fuel manufacturers,
insurers, real estate investment trusts and wholesaler-distributors.
“These campaigns often involve idiosyncratic agendas that are wholly
unrelated to increasing long-term value for shareholders.”
days of the corporate raiders of the 80s, activist hedge funds have
evolved into a formidable force, with an estimated $200 billion to
invest. Carl Icahn has rebranded himself as an outspoken shareholder
advocate. Latter-day activists including Loeb, Ackman and Jeff Smith
often write poison-pen letters to seek changes to corporate strategy
and criticize portfolio companies on business television.
White said the SEC plans to recommend rules that would allow
shareholders to vote for both management and dissident-supported
directors in proxy fights. Current rules allow companies to exclude
names of investors’ director candidates from ballots cast in advance
of annual meetings.
chamber’s new group will be overseen by Tom Quaadman, vice president
of its center for capital markets competitiveness, said spokeswoman
Erica Flint. The group has 13 members, including the American Bankers
Association, the Securities Industry and Financial Markets Association
and the National Association of Manufacturers.
chamber’s coalition wants to “facilitate long-term value creation,
they should support reforms that strengthen shareholder rights and
oppose arrangements that insulate managements from shareholders,” said
Lucian Bebchuk, a professor at Harvard Law School.