Invest Like the Best with Patrick O'Shaughnessy Lauren Taylor Wolfe – The Modern Activist Toolkit - [Invest Like the Best, EP.192]
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Sep 22, 2020 Lauren Taylor Wolfe, co-founder and Managing Partner of Impactive Capital, discusses the modern activist investor playbook. She delves into how strategies have evolved, favoring collaboration over the traditional adversarial approach. Wolfe emphasizes the importance of ESG integration and long-term value creation. The conversation also touches on the growing impact of employee activism post-COVID and the need for diverse leadership in corporate governance. Additionally, they introduce Positive Sum, a new initiative focused on early-stage equity investing.
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Long-Term Value Creation
- Lauren Taylor Wolfe observes that high returns in activist investing often come from high-quality businesses held long-term.
- Short-term fixes in low-quality businesses can yield initial gains, but long-term value impairment poses a greater risk.
Activist Engagement and Compensation
- Approach engagements with humility, leading with data and seeking partnerships with management.
- Design compensation structures that reward overall firm profitability to foster collaboration and avoid internal competition.
Capital Allocation in Boardrooms
- Lauren Taylor Wolfe observes that while communication around capital allocation has improved, many corporate boardrooms lack the resources for strategic decision-making.
- She advocates for capital allocation committees and better access to research and data for boards.
