Catalysts – A Summary (Part II of II)

Tags

activist investors, Argo Group, Avangardco, binary outcomes, Carl Icahn, catalyst, Daniel Loeb, Expected Value, government regulation, Herbalife, IRR, junk bonds, litigation, major sale, NAV discount, Risk Arbitrage, Robert Chapman, share buyback, shareholder activism

Continued from here.

iv) Activist Investors are my next catalyst. Obviously, there’s no specific timetable here, but since most activists are performance-driven hedge funds, a 6 mth to 2 yr timeline is reasonable. Activists in the UK usually target asset discounts & realizations (so investment trusts/companies are ideal), while European/US activists are perhaps more biased towards operational change (which may require a longer investment horizon).

Most activists prefer to agitate for change behind the scenes, but some prefer to be more public: Carl Icahn (I read King Icahn at least once a year) is the king of the activists – he’s 77 now, but is more of top of his game today than he was 30 yrs ago! Other notorious activists (& 13D filers) are Dan Loeb of Third Point (and here, though he claims he’s mellowed now!) & Robert Chapman, who (presumably!?) introduced the first ‘fuck‘ in an SEC filing. More in-depth reading material includes ‘Risk Arbitrage‘ by Wyser-Pratte, ‘Extreme Value Hedging‘ by Orol, and certain chapters of ‘Free Capital‘ by Guy Thomas.

Advertisement

AGI Therapeutics – Anatomy of a Takeover (I)

Tags

AGI Therapeutics, Ark Therapeutics, Carl Icahn, catalyst, Daniel Loeb, Recommended Cash Offer, Risk Arbitrage, Seth Klarman, TGISVP

This post, and this one here, are good required reading. Yes, AGI Therapeutics (AGI:ID/LN) was the Risk Arb investment to which I was referring.

This is the one Irish share I did not disclose owning during TGISVP. My apologies, readers – but AGI trading volumes were atrocious, and I was still building a position with great difficulty. However, when I got to covering AGI during TGISVP, I simply tagged its fair value as simply being equal to the Recommended Cash Offer – so no issues there, I believe. Now that I recently received my final batch of proceeds from the AGI takeover, I thought it might be useful/interesting to walk through my thinking and exact positioning throughout the process.

How About Another Catalyst? (Part VI)

Tags

ABC Arbitrage, activist investors, Biglari, Bourbaki, Carl Icahn, Christopher Mills, Crystal Amber, Damille, GPG, Harbinger, Laxey, Risk Arbitrage, Ron Brierley, Sherborne Investors, Terra Catalyst

Continued from here:

I’m not suggesting you swap your whole portfolio into an activist tracker portfolio! There are some websites/blogs out there suggesting this approach, but I’m not convinced. This probably just reflects my (mild) aversion to ‘mechanical’ investing approaches. I also think if you actually tackled this kind of project in the manner it deserves, you’re probably a pretty experienced and disciplined investor already!

The other problem is that many activists, by definition, are often taking on poorly performing companies, possibly with equally poorly performing management. (Another reason activist hedge funds always have their eye on the clock!). Or they invest in a situation where, for the life of me, I can’t see any apparent value. Do you really want to coat-tail on an investment like that?

How About Another Catalyst? (Part V)

Tags

activist investors, Bill Ackman, Carl Icahn, Chapman Capital, Daniel Loeb, Eddie Lampert, Free Capital, Guy Wyser-Pratte, IIU, Laxey, QVT, SEC Edgar, TVC Holdings, Weiss

Continued from here:

iv) Activist Investors are the next catalyst I’d like to highlight. Obviously, there’s no well-defined timeline involved here, but considering the approach of most hedge funds (who comprise the majority of activists) and their return expectations, a timeline of 6 months to 2 years.

Activists targeting asset discounts/realizations will tend to have a shorter holding period, while activists seeking operational change are usually forced to adapt to a longer investment horizon. With the multitude of investment trusts and companies listed in London, activists have generally focused on the former type of operation, while elsewhere in the world they focus more on significant operational changes/improvements to a business.