[Jim] Rossman, who heads the corporate preparedness group at Lazard, has expanded his team globally to more than a dozen activist-defense bankers over the past three years. Among their tasks is a comprehensive study of every investor reporting holdings in any of 1,000 companies, including all of the S&P 500 constituents. The bankers are calculating how much of each stock is owned by an exchange-traded fund, a mutual fund, a hedge fund, or other asset manager. That way, Rossman says, he can start to predict how influential an activist investor may be.
“If you are the CEO of a very large or midsize company in the United States, you’ll find that 30 to 40 percent of your stock is being managed by no one you can talk to,” Rossman says. “That raises an issue, right?”
The flood of money into ETFs has posed a special problem for CEOs: How do you influence investors who are automated?
Rossman’s thesis is that activists could gain more clout as stock ownership is concentrated among fewer owners, with funds shifting to indexed strategies.