PER 2015
Sterling vs Deutsche Mark in 1992
Vulture Funds Distressed investing, often carried out by Special Situations and Vulture Funds, involves taking positions in securities that are experiencing financial worries or facing impending default and/or bankruptcy. Distressed securities tend to trade at a significant discount to their intrinsic value so present the fund manager with an opportunity to generate large profit. Analysts use complex statistical models to analyse these distressed companies and computate the likelihood that they will recover successfully. Shareholder Activism
Activist investors use their equity stake in a corporation to pressurise the board of directors into making significant changes to the way they run their operations, cutting costs or reshuffling management structure for example. Third Point Management were able to leverage a 5.3% stake in Yahoo into seats on the board of directors for Daniel Loeb, its CEO, as well as restructuring specialist Harry Wilson and activist investor Michael J. Wolf in May 2012. After making structural changes, Third Point Management were then bought out by Yahoo, resulting in a profit of $1 billion for the fund as they resigned from the board.
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