Actively Tracking Active Investors

Novus

Stan Altshuller

Article

1 Pages

Novus examines how activist hedge funds built scale, generated excess returns, and absorbed illiquidity risk through a composite portfolio of 60 managers. Activists controlled 9.3% of hedge fund equity assets in 2014, while simulated activist longs outperformed both the S&P 500 and hedge fund universe.

Key Takeaways

Activist Assets Surged: Publicly reported activist assets reached $176 billion in June 2014, up from 3.9% of hedge fund equity assets in 2004 to 9.3% in 2014.
Returns Beat Benchmarks: The Novus Activist Portfolio annualized 13.6% from 2004 through June 2014, versus 7.8% for the S&P 500 and 5.5% for HFRI.
Illiquidity Rewarded: Activist positions requiring over 120 trading days to exit generated a 4.7x win/loss ratio, highlighting how concentrated illiquid holdings amplified upside historically.
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