Last year, 147 investors launched activist campaigns — an all-time high — including 43 by first-time activists, according toAlongside that trend, investment banks like Goldman Sachs, Evercore, and Lazard have built out teams dedicated to helping companies strategize and defend against investor attacks.
They're not hunting for market inefficiencies and trading ideas a la quant funds like Two Sigma or Renaissance Technology, but rather they're looking to bolster the advice they give a CEO or board. "Instead of just having an ability to cover 20% of the market with your smaller core team, you can now cover the whole market, because you still do the core 20% but you do it where you can have the most impact," Paterson said. "And the other 80% of the marketplace, the coverage teams know enough, have enough training, have enough content, enough awareness to integrate it into their day-to-day coverage efforts.
"Muir and I can do a couple hundred meetings a year, but our content has been used in the order of 3,000 to 5,000 meetings a year," Costanza said. "And so what does that do? Well, that has created the ability for bankers to include the impact of decisions on their shareholder base in a much broader set of meetings than would otherwise have been able to be to be done."Senior executives quickly took notice.
The other pillar comprising the new unit is Citi's corporate finance advisory team, known internally as the financial strategy and solutions group, which has been in the spotlight within the investment bank amid the fallout from the coronavirus pandemic. Khorona will work closely with Paterson in a senior coverage role once the groups are merged, according to the memo.
Careful with this. It can set you up for discriminatory practices. Spreadsheets can be misleading and disconnected from reality.
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