What is an activist hedge fund?
An activist fund buys a large stake in a company it thinks is undervalued and then pushes management to change course: seats on the board, a sale or break-up, buybacks, cost cuts or new leadership.
Activists work through letters to the board, public campaigns and, when that fails, proxy fights where shareholders vote on the activist's nominees for the board. Well-known activists include Elliott Management, Pershing Square (Bill Ackman), Icahn Enterprises (Carl Icahn), Starboard Value, Trian (Nelson Peltz) and ValueAct.
Following them
An activist that buys more than 5% of a company files a Schedule 13D within 5 business days, stating its plans, and an amendment within 2 business days of any material change. Those filings are some of the most closely watched in the market. On HedgeFollow they're tagged Activist.
Related pages: Hedge Fund Tracker