Activist investors: Flight of the locusts

Will the retreat of activist investors give industrial bosses more leeway to manage?A YEAR ago Stephan Howaldt, the chief executive of Hermes Focus Asset Management Europe, a British activist fund, was in full cry against the Pesenti family, an Italian industrial dynasty. The fund had taken a stake in Italmobiliare, a financial holding company controlled by the family, which in turn controls Italcementi, the worlds fifth-largest cement-maker. Hermes demanded a performance review for Carlo Pesenti, Italcementis chief executive, and said the cement firm should sell its stakes in unrelated businesses such as newspapers and banking. Things got personal: the family executives, Mr Howaldt said, became unusually closed-up.Italcementis management was therefore delighted when Hermes said in January that it was reorganising its fund and replacing Mr Howaldt. The funds activist style had been disproportionately hit by the financial crisis, it explained. Hermes still owns shares in Italmobiliare, but its management is not expecting much further pressure for change. ...