Activist Heavyweights Form Lobbying Group

Major activist hedge funds have formed a lobbying group called Council for Investor Rights and Corporate Accountability (CIRCA) to promote shareholder activism across the country.

The announcement comes as presidential candidates Hillary Clinton and Bernie Sanders have been voicing against activist investors in their respective campaigns.

Reuters reported the Washington, D.C.-based trade association is backed by William "Bill" Ackman (Pershing Square), Carl Icahn (Icahn Enterprises), Daniel Loeb (Third Point), Barry Rosenstein (Jana Partners) and Paul Singer (Elliott Associates).

According to the report, CIRCA is "committed to promoting the actions of shareholder activists, and their positive impact on corporate governance and business policies at publicly traded companies."

Activist investors buy minority stakes in companies that they term undervalued and then push for changes in corporate strategy and board composition, sometimes leading to a proxy fight if the company doesn't agree to their demands.

Related Link: What Can Be Learned From Ackman's Foray In Valeant?

Notably, Ackman appeared in front of a Congressional committee over his investment in Valeant Pharmaceuticals Intl Inc (NYSE: VRX), which is under federal investigation for its use of specialty pharma companies and inflating prices of drugs.

Billionaire investor Icahn has targeted companies including Apple Inc. (NASDAQ: AAPL) and eBay Inc (NASDAQ: EBAY).

Recently, Yahoo! Inc. (NASDAQ: YHOO) added four new directors to its board as part of a settlement with activist investor Jeff Smith of Starboard Value.

Thomson Reuters data show activist investors have launched a record 508 campaigns against U.S. companies last year, including heavyweights such as E I Du Pont De Nemours And Co (NYSE: DD), General Electric Company (NYSE: GE) and American International Group Inc (NYSE: AIG).