The New Corporate Raiders

Increasingly industry analysts and legal professionals are calling hedge funds — money management firms that cater to institutional investors or wealthy individuals — a serious force for corporate change.

Now comes a report from investment bank Morgan Joseph that attempts to track the recent wave of hedge fund activism. One of its most notable findings: When hedge funds decide to make demands of a company as part of an activist campaign, they are likely to get what they want.

Morgan Joseph writes: Regardless of the demand made, activists prevailed in enacting change in the majority of the campaigns we tracked. This leaves no doubt that activists are a credible threat that should be taken seriously by a company’s management and board of directors not just during a campaign—but before it has begun as well.