User:CoInvestor/Sandbox

Strategic block investing is a hybrid investment strategy where investors aim to play a constructive, active role in unlocking value from public companies through the implementation of financial, operational and governance initiatives from both minority and control positions.

The style and level of engagement by strategic block investors varies. The majority position themselves as “company-friendly” and operate with a high level of engagement. Some strategic block investors are prepared to take aggressive action if their proposals for improving shareholder value are not actioned. Most exponents employ some of the skills traditionally used by private equity investors, however unlike private equity investors, they specialize in dealing with listed companies.

The Industry
Globally there are ten known dedicated exponents of this investment style, managing an estimated US$10bn of third party funds. Richard C. Blum established Blum Capital Partners in San Francisco, which pioneered company-friendly strategic block investing in 1975.

Other US-based firms include Sageview Capital LP in Palo Alto, Blue Harbour Group LP in Greenwich, Connecticut, Prides Capital  in Boston and Hale Capital Partners  in New York.

In the UK and Europe five investors have dedicated strategic block investment operations, namely Cevian Capital based in Stockholm, 3i Quoted Private Equity  based in London, SVG Capital  based in London, Dexter Capital Group  based in London, and CapMan Public Market  based in Helsinki.

The only known dedicated company-friendly strategic block investor in the Asia-Pacific region is Co-Investor Capital Partners based in Sydney, Australia.

There is a marked contrast between company-friendly strategic block investing, whose exponents have been referred to as the “anti-raiders” and shareholder activists.

According to the Financial Times (Monday 4 June 2007) “…there is a fundamental difference between their tactics and those of Blue Harbour and Sageview, who exert a level of exert a level of pressure on managements, but without engaging in proxy fights. Instead, they look at companies through what they describe as a ‘private equity lens’ identifying targets that are undervalued and could do with some form of transformation, whether in the form of balance sheet restructuring, the disposal of certain assets or the sale of the entire company.”