Bolton attacks Cadbury split in face of activists
Thursday 14 June 2007
Anthony Bolton, Britain's most-feted fund manager, has attacked Cadbury Schweppes' decision to split its operations after pressure from a hedge fund, saying it "could represent a come-on to every corporate raider or activist investor".
Mr Bolton, the Fidelity fund manager who has led some of the most high-profile investor battles with managements in recent years, says the events at Cadbury could change the investment landscape, "altering the relationship between shareholders and the companies in which they invest".
"I don't think the relationship between UK companies and their shareholders will ever be quite the same again," Mr Bolton writes in a column today in the Financial Times writes Tony Tassell of the FT on June 11 2007. More at FT
I find this an interesting story. Why?
I am not anti the activist hedge fund investors who appear to be stirring up management of some of our public companies, especially when so many institutional shareholders may not use their rights as shareholders to influence management. I think shareholders must use their rights. Remember that it is the shareholders that own the company not the management. It is the shareholders that carry the risks and they should be entitled to a return on their capital. Management with their sometimes excessive remuneration structures, have a duty to their owners. A point that John Bogle highlights in his book The Battle for the Soul of Capitalism
I fear sometimes that fund managers as proxy owners for many thousands of investors must use their powers more often as these activists have done to bring the focus back to shareholder power rather a quasi abdication to management.
Categories: Philosophy, Hedge Funds
posted by Murray Round Wealth Management @ 21:44,
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