Jana's Rosenstein Sees Best Activist Environment In Quarter-Century

Oct 8 2010 | 10:48am ET

Expect big things from activist hedge funds, according to one prominent activist hedge fund manager.

Jana Partners' Barry Rosenstein, speaking at the Excellence in Investing conference in San Francisco, said there are more activist opportunities now than at any point in the last 25 years. Rosenstein noted that cash on corporate balance sheets currently represents 12% of company assets, a level he calls "unsustainable," while low stock prices and low corporate borrowing rates make "acquisitions very attractive."

Rosenstein specifically mentioned Dutch postal company TNT and research firm Charles River Laboratories as strong prospects. Unsurprisingly, Jana has sizeable stakes in both firms.

Rosenstein also cited an urgency among private equity firms as one source of pressure for an uptick in acquisitions. P.E. firms have some $500 billion in uncommitted capital, with about half set to be returned to investors within five years if it is not invested.

"Guess what?" Rosenstein asked. "They're going to find a way to spend it, not give it back to their investors."

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