LONDON (Reuters) - Powerful hedge fund investors will increasingly seek a bigger say in the running of companies they invest in, said an investment manager for Titanium Capital on Wednesday.
Sid Shamnath, a manager of Titanium's Global Event Driven Arbitrage Fund, said some of the large hedge funds had less freedom than their smaller rivals to take and exit positions and so needed to take a longer term view of their investments, prompting greater interest in company strategy.
"Large funds, like those managing something like 4 billion dollars, need to take a longer-term view ... and need longer lock-up periods for investors," Shamnath said at the Reuters Hedge Funds and Private Equity Summit in London.
"Once you are in that situation and you own, say, 5 percent of the company, you need to hold management meetings to discuss strategy."
Titanium Capital's event-driven fund has $100 million of assets under management.
Some relationships between companies and hedge funds have already turned sour. The Children's Investment Fund, for example, helped orchestrate the removal of Deutsche Boerse's (DB1Gn.DE: Quote, Profile, Research, Stock Buzz) chairman Rolf Breuer and chief executive Werner Seifert to register their disapproval of the Frankfurt bourse operator's attempt to buy the London Stock Exchange (LSE.L: Quote, Profile, Research, Stock Buzz).
Brian Magnus, co-head of UK Investment Banking at Morgan Stanley, said shareholder activism was a "weathervane of the state and maturity of capital markets".
"Shareholder activism had been confined to the UK alone until not very long ago. Now we're seeing it across Europe, in Germany, even Italy," Magnus told the Reuters Summit.
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