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Executive Insight Thought Leaders showcase our latest thinking on organizational strategy, globalization and talent management. Each issue features one or more articles by Charlesmore consultants or our business friends and colleagues on important management topics. The publication also regularly features the results of our research in specific industries, geographic areas, or topics.

Executive Insight Thought Leaders are published monthly on this website as well as emailed to a confidential subscriber list around the world. Past issues can be found in the Archive section of this website. Subscribe >

Understanding activist hedge funds

Although no one really knows for sure, it is estimated that there are over 10,000 hedge funds now managing close to $2.0 trillion in assets. Fueled by investment flexibility, little SEC oversight, diversified returns not correlated with market movements and enormous amounts of capital continuing to flow their way, hedge funds are increasingly a major force in today’s equity and debt markets and, as a result, continue to create anxiety in boardrooms throughout the world.

Not surprisingly, chief among board concerns are the powerful, demanding and relentless activist hedge fund. These are the funds loaded with cash, often hunting in packs and using aggressive tactics such as proxy contests to drive out the leadership in targeted underperforming companies. Even in today’s shaky credit markets - and maybe even now more than ever, activist hedge funds are seeking to use their power to demand instant rewards and fundamental changes in corporate policy.

Why organization strategy matters

Top performing companies successfully leverage their organization more effectively than rivals and derive over 64% more profit per employee than next-tier performers.

Few companies though look at their organization as strategically and holistically as they might - which is surprising considering the extent to which organization capabilities and performance drive business value today.

We contend that absent such consideration and definition, gaps and misalignment will frustrate business strategy and desired performance objectives will not be met. It’s as simple as that.

Developed and implemented effectively organizational strategy enables companies to convert strategic intent into sustainable and high performance results.


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