Wednesday, 30 July 2014
Last updated 12 hours ago
May 5 2014 | 2:20pm ET
Berkshire Hathaway’s second-in-command thinks shareholder activism is bad for America. Two of the strategy’s most prominent representatives agree—to a point.
Carl Icahn and Pershing Square Capital Management’s William Ackman, until a rapprochement last month bitter enemies, said they agreed with Charles Munger’s criticism of “short-term” activism. But they made clear that they don’t consider themselves short-termers.
“I 100% agree with them,” Ackman said. The Pershing Square chief, who attended Berkshire’s annual meeting this weekend in Omaha, Neb., said that pushing for short-term gains without long-term benefits to a company is “bad for markets, and it’s bad for shareholders.”
By contrast, Pershing Square typically holds its investments for “four, five, six years or more,” he said.
For his part, Ichan said he understands “and somewhat agree with their criticisms that some activists are going for a short-term pop.” But, he warned, “that doesn’t mean you throw the baby out with the bath water. One of the most important things we need in this country is to keep companies accountable.”
Munger told the assembled Berkshire shareholders of activism, “I don’t think it’s good for America.” And he and Berkshire chief Warren Buffett warned that the menace is here to stay.
“They are certainly attracting more and more money,” Buffett said. “I don’t think it will go away, and I think it scares the hell out of a lot of managers.”
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…