The research suggests activism – a strategy whereby “fund managers agitate for corporate change” – is a small but growing movement in Australia.
“While activism is a fledgling investment strategy for Aussie fund managers, there is encouraging momentum,” the report stated.
According to Credit Suisse, activist strategies have delivered strong results in the last decade.
“Global hedge-fund activists have outperformed almost all other equity strategies over the last 10 years,” the report said.
“The 10 biggest global activist funds now have more than $200 billion in AUM.”
The report suggested Australian fund managers are facing pressure to justify their fees, which may encourage them to turn to activism.
In addition, Credit Suisse believes global activist investors will have a significant impact on Australian markets.
“For now, global activists will potentially play a more important role in agitating for change in Australia,” the report said.
Credit Suisse identified 18 Australian listed stocks that they believe could attract the attention of global players.
“They include companies with underleveraged balance sheets like CSR, Resmed and Rio Tinto,” it said.
“Also, stocks trading at a considerable discount to their sum-of-the-parts like Myer, Toll and Woolworths.”
In pursuing this type of strategy, investors may push for capital returns, operational gains and changes to corporate governance, the report said.
In some cases, activists might lobby to sell the company, block an acquisition or sell down assets, it suggested.
There are no legislative obstacles to shareholders pursing similar tactics in Australia, according to the report.
